When we think of bankruptcy, we typically think of destitution, stress, and damaged credit scores. But when we think of bankruptcy through this rather limited lens, we overlook the numerous instances when bankruptcy is the only - or even the more preferable - solution to insolvency.
Here we are speaking of a debtor making the voluntary decision to declare themselves bankrupt. That is, we are not speaking of bankruptcy being enforced upon you. Voluntarily choosing to declare yourself bankrupt is not an option to be considered lightly. However, if other debt repayment options prove unsuccessful and there is little hope that you’ll repay your creditors in a reasonable amount of time, bankruptcy might prove to be a viable solution to insolvency. Let’s explore this matter in more detail.
We all know the downsides of bankruptcy. When you are declared bankrupt, an official receiver takes possession of any assets of value, such as your home, business, and vehicle - all of which will then be sold off to pay creditors. On top of this, bankruptcy stays on your credit file for six years, and Income Payment Agreements (IPAs) can last for up to half of that time. It is for these reasons that bankruptcy is considered to be a final resort for individuals facing unmanageable levels of debt.
Despite these intrusive sanctions, bankruptcy needn’t be the end of the world. In some cases, it might even be beneficial. Of course, this all depends on your specific financial situation. However, as a general rule, if the amount of debt is greater than the assets owned by the debtor and repayment would take many years, bankruptcy might be the preferable debt repayment option.
Additionally, despite common conceptions, there are many upsides to bankruptcy. The fact of the matter is that after you declare yourself bankrupt, you won’t hear from your creditors again. This is because declaring yourself bankrupt stops creditors from taking any further legal action against you and any unpaid debts are usually written off. What holds many people back from considering bankruptcy is the prospect of damaging their credit scores, in turn damaging their access to credit in the future. However, if a debtor has been struggling with debt for a long time, their credit score is already bad, so bankruptcy might just be the logical next step.
You should always seek professional advice before making the decision to declare yourself bankrupt. Like any debt management solution, bankruptcy has pros and cons. That said, it is an option worth considering. A limited free consultation with Silver Insolvency Solutions could be of enormous benefit to you.
Website: www.silverinsolvencysolutions.co.uk
Telephone: 0303 961 7169