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If you are finding it difficult to pay off your debts then you may think that filing for bankruptcy is the only option. However, you will find that if you seek bankruptcy advice, a number of alternative solutions will present themselves and could help you become debt free over the course of a few years. One of the most common alternatives to bankruptcy is applying for an Individual Voluntary Arrangement (IVA). Under an IVA, you will agree to repay your debts at a fixed monthly amount and all the interest and credit charges associated with those debts will be frozen. In order to apply for an IVA you will need to enlist the services of an insolvency practitioner, who can negotiate with your creditors and present your case in court to set up the IVA. An arrangement such as this will usually run for five years, during which time you will continue to make regular repayments of your debts, however, your creditors will not be allowed to demand any more money from you and at the end of the IVA, your debt will be considered settled - regardless of how much is still owed. In order to be awarded an IVA, 75 per cent of your creditors by the value of the debt must agree to the repayment schedule. Unlike bankruptcy, you will not be placed under any restrictions when it comes to your finances or working life after your IVA comes to an end. For smaller debts, you may decide to consider a Debt Relief Order (DRO). These can only be issued to people who owe less than £15,000, do not own any property and do not have the surplus income to repay the money they have borrowed. DROs are usually valid for a period of 12 months and during that time, any creditors listed on the order cannot contact you to demand further payment unless they gain permission to do so from a court. At the end of the specified timeframe, your financial circumstances will be reassessed. If nothing has changed then all your debts will be written off and you will be debt-free once more. When it comes to settling debts, another option open to you is an informal arrangement. As the name suggests, this is not legally-binding but it is one way that you can approach individual creditors and come to an agreement about repaying what you owe. For debts of less than £5,000, a creditor may apply to the court for an administration order. This is a legal contract that will require you to make regular payments to the court. This money is then passed on to your creditors. However, it is advisable to seek advice from a professional regarding your individual financial circumstances before making a decision about which way of managing your debt is most suitable. If you're looking for bankruptcy advice, then Debt Options can help you find the right strategy to help you with your financial problems. Our team have over 11 years' experience of assisting with serious debt problems and have provided assistance to thousands of people with solutions such as setting up an IVA.
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