About Bankruptcy, IVA & Debt Write-off
Author: Chris Ball
Bankruptcy is an evil word which scares many people out of their wits. The stigma attached to bankruptcy has led many to contemplate suicide. In the UK, public announcement of bankruptcy has probably been a contributing factor for many to avoid it under any circumstances. But there are many financial reasons other than sentiments which must guide us to avoid bankruptcy. How does bankruptcy affect you as an individual? In UK, the court has the authority to declare any individual bankrupt. The process can be initiated either by the individual himself or by the creditors. Once declared bankrupt, the status remains for a year and during this period your assets including your house can be sold to recover the debt owed. Though, legally your bankruptcy status may remain only for a year, you will never be completely absolved of this financial set back. Your credit history will always reflect the fact that you had once declared bankruptcy and you are legally required to declare it on loan applications and other forms. Obviously you will find it difficult to obtain loans which in a way would be good for you. Bankruptcy should always be a last resort especially for those in UK since there are other means to escape from it. These include Independent Voluntary Arrangement (IVA), Debt Management, Debt Consolidation and Legal Debt Write-off. Of these it is always worth talking to a professional about Legal Debt Write-off, because it is pointless paying a debt that you do not have to. There are many routes for Debt write-off and you must approach a professional to negotiate on your behalf. Not that you cannot do it yourself but there might be legal provisions which may be too subtle for you as an individual to understand and capitalise on. Debt write-off if negotiated skilfully can save you money as well as mitigate mental agony. You must act fast since delay means more interest. Remember, Banks are charging interest on your loan every minute and your debt is increasing exponentially. It is therefore advisable to resort to debt write-off as soon as possible. In the UK there are a number of laws covering loans and credit cards, most important of which are the Consumer Credit Act 1974 & 2006, though other laws including Contract Law, The Bills of Exchange Act 1882 and others provide routes of legal redress. Despite these routes to having debts legally written off by the courts, many people are still entering in to an IVA arrangement. In the UK, an IVA is a process by which you can formally approach your creditors and present a case for debt write-off of a portion of the debt with an arrangement to repay the remainder over a 5 year period. This is often possible when you have unsecured debt like credit cards and personal loans. One of the major advantages of IVA is that you can stave off bankruptcy. The IVA process allows you to come to an understanding in which you can pay creditors only once every month. The IVA process begins with an assessment of your existing liabilities and assets. The monthly income and expenditure is also taken into account. After deducting your expenses for the month, the actual repayment amount is reached. This is to ensure that you don't default on the agreed repayment and you can meet your new commitments. Very few individuals in UK are aware that Banks while giving loans draw up contracts which are actually illegal. The Consumer Credit Act 1974 amended in 2006 provides relief for those who are victims of illegal contracts. Since this is a legal process, it is advisable to consult professionals to get your debt written off. With this process it is possible to clear the entire debt without paying a single penny to Banks. Although not an easy route to take it can be extremely advantageous for many, as the process can usually be completed in less than a year at which point the debt is gone. Obviously, it is important to ensure that the agreement is genuinely flawed and that the debt can be legally written-off before upsetting your bank.
Article Source: http://www.articlesbase.com/finance-articles/about-bankruptcy-iva-debt-writeoff-833022.html
About the Author:
After the loss of his business of 21 years in the Banking Crisis, Chris Ball was left with debts that were beyond his ability to pay. He had to find a unique solution to this difficult situation. In the process he learned a massive amount about how debt works in society and why it is eventually bad for everyone.
http://www.IDeserveDebtFreedom.com
