Voluntary Bankruptcy

We have been reading time about people getting into depression, suffering health problem and sometime even committing suicide because of being unable to repay their unsettled debts in UK. This is indeed a sad fact but there is one thing common among all these people. These people were not fully aware of concept of Bankruptcy.

In the world of bankruptcy, being unable to repay debts does not means you are cheating or are trying to fraud with bank. A current analysis has shown more than 75% of business have cash flow problem and most of them ultimately end up being bankrupt or in big losses.

Bankruptcy is offered as an option to UK individuals or households who are insolvent, meaning people who are no longer able to pay off their debts. You, as an individual, can file for bankruptcy voluntarily, but it also can be asked for by a creditor if your debt is larger than £750.

Of all the solutions available in the UK for debt problems, bankruptcy still counts as the most drastic, since it has the longest lasting consequences. It's best that you should first seek professional advice before going ahead with it since there are quite a few implications that you may want to avoid.
As form of negative examples, homes and cars or any valuable possession can be taken away. Also once you are declared bankrupt; it also will be extremely difficult to get credit or a mortgage after bankruptcy. Banks may reject your loan or credit card request.
The main alternative to filing for bankruptcy for many people in different parts of UK is filing IVA, or Individual Voluntary Agreement. This is a voluntary agreement which a person submits stating his financial obligations, reasons for debt overhead and how he thinks he can repay his debts. However, there are certain circumstances where a person has nothing left against which he can repay and this situation, filing Bankruptcy can be the only choice.
If you find yourself meeting the next conditions, then it's most likely that applying in court for bankruptcy can be your sole option.
If there is no chance of being able to set up an alternative such as an IVA.
If you have no assets and no available income. This is the situation where you think that you have no income source or any property against which your unsettled debts can be resolved.
If you have retired, or you are sure you will have no future need for credit. If you are retired so you can show court that you have limited or no income in your retirement period. Also, if you have no future need of credit then you may not worry much about being declared bankrupt.

The advantages of filing for bankruptcy are that all your unsecured debts are written off, the exception being student loans. Also, depending on the conditions of your discarge, you will be able to make a fresh start after twelve months.
Of course, there are disadvantages to this procedure. As such, you may have to sell your home and other assets such as cars worth more than £500

You won’t be able to get credit during the period of bankruptcy.
Credit is very difficult or expensive to get afterwards.
A bankrupt cannot have certain careers or be a director of a company.
Your situation may be made public.

The bankruptcy procedure:

As part of your bankruptcy petition, you will have to complete the following bankruptcy forms:
Debtor’s Bankruptcy Petition.
Statement of Affairs, Debtor's Petition.

If you are unable to find these forms, you can check The Insolvency Service website or you could buy them from a legal stationers.
If you are finding it difficult understanding how to fill these forms, you can contact your local advice Bureau. It’s a great idea to contact local Citizens Advice Bureau or the Insolvency Enquiry Line to ensure that there is no mistake in filling forms.
The contact details is 0845 602 9848. They are open Monday to Friday from 8.00 am to 5.00 pm.

While contacting these local advice bureaus, it will be necessary that you give the reasons why you are applying for bankruptcy in the Debtor’s Bankruptcy Petition.
Also, you will be required to list all your assets (cash, property, shares and / or other valuables) and the sum of unsecured debts, including the names and addresses of all your creditors, in the Statement of Affairs.

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