There are plenty reasons why you would want to avoid bankruptcy and search for an alternative. We’ve heard the stories about bankruptcy over the years, played board games where bankruptcy was a possibility and perhaps even know somebody who has gone bankrupt.

There are alternatives to bankruptcy which you may wish to consider along with bankruptcy. This is a sensible approach as you will be reviewing every available debt solution and making an informed decision about your debt problem.

For an alternative to bankruptcy telephone our registered debt advice charity, Debt Support Trust, on 0800 085 0226 or complete a debt analyser for online debt help.

Avoiding Bankruptcy

At Debt Support Trust people often ask us to help them avoid bankruptcy and suggest an alternative to bankruptcy. There are some solutions which you may wish to consider.

Debt Management Plan: This is an informal debt solution for people struggling to meet their contractual payments to their debt. This solution can help you to avoid bankruptcy by repaying all of the money you borrowed but over a longer period of time. Interest and charges are not guaranteed to be frozen and your credit file will be damaged.

IVA: An IVA stands for an Individual Voluntary Arrangement.  This solution is a formal, legally binding solution where you pay an affordable amount to your debt every month for 5 years. At the end of the solution any remaining debt is written off and you are debt free. The interest and charges are guaranteed to be frozen but it will impact your credit file for 6 years.

Trust Deed: A Scottish debt solution similar to the IVA but only lasting for 4 years. This solution helps you avoid bankruptcy but is an insolvency solution which will impact your credit file. Assets with equity in both an IVA and Trust Deed will need to be evaluated and any available income potentially released.

These alternatives to bankruptcy come with positives and negatives which should be explored fully before entering the solution. Always speak to a registered debt help charity about bankruptcy or any other debt solution as they will not charge you for their service.

Advice on Bankruptcy

If you are unable to meet the criteria for the other debt solutions then Bankruptcy may be the best debt solution for you.

Bankruptcy lasts for 1 year and then you are discharged. In England, Wales and Northern Ireland an Official Receiver will be appointed to your case who will assess your financial situation. The Official Receiver works within strict guidelines to determine how much, if any, money you have disposable each month. If you are solely on state benefits these will not be taken into account. If you’re spending excessively (£100 for instance) on hobbies and entertainment then they can restrict this. The Official Receiver will determine how much disposable income you have and you will be asked to make these contributions in an income payment arrangement.

If you would like help with bankruptcy then you should contact a free debt advice charity who won’t charge you for their help. Debt Support Trust can provide you with guidance and support with your bankruptcy and assist you through the process to become debt free again.

Help with Bankruptcy

To seek help with entering bankruptcy then you need to speak to Debt Support Trust on 0800 085 0226 or complete our debt test form.

Professional & Supportive Advice

We’re fighting your corner to help you become debt free. For more information on how we can help, please get in touch.