How to face the threat of bankruptcy
By Nigel in Latest News on 17 May 2010
The record insolvency figures reveal that the economic crisis is far from over and even though the economy is showing signs of revival, it has left a lasting legacy. Going by the reports, more people are expected to go bankrupt in the coming months.
Each year sees more than 100,000 people becoming insolvent and experts warn that if they don’t seek debt advice on time, the problem is not going to go away any time too soon.
Experts attribute the sky-high figures to a debt-lag effect where in bills pile up over a period of time due to overspending at times like Christmas and also because of the ongoing impact of the financial crisis.
Then there are other factors that are responsible for individual debts the most important being the loss of jobs and decreased earnings. Some financial experts also feel that credit was so cheap and plentiful that people were lured into taking loans, using credit cards beyond their means, and taking higher mortgages than they should have.
The ‘buy now and pay late’ culture has also contributed its share to the financial distress. Most people have little idea of how crippling debt can be and once they start getting into debt it becomes hard to avoid falling into a vicious circle.
So how to break out of this vicious circle?
Well the first and foremost is to seek debt advice. If you are already in debt, this may not seem a viable option because you may not want to add to your expenditure but do realise most reputed debt management companies in the UK offer debt advice for free. You can talk to the financial experts and they will study your financial situation and suggest the best way forward. Usually, debt solutions include striking a deal with your creditors, entering an IVA (Individual Voluntary Agreement), taking a debt consolidation loan, and in extreme cases, declaring bankruptcy. Which is most suitable will depend on your debt level and individual circumstances and so it is important to seek debt advice to understand which option works best for you.
I hope you find this useful and I look forward to any comments you may have.
Thanks
Nigel
I couldn’t agree more that the first major step is facing up to the problem and speaking to somebody about it. Even when bankruptcy is clearly the best option though the stigma of it tends to prevent people from acting.
What a lot of people don’t know as it has recevied little or no publicity is that details of bankupts are no longer published in the local paper unless they have tried to deceive the official receiver or have affected the local community in some way by going bankrupt.
While not wishing to encourage people to follow this course of action without serious consideration and speaking to a professional, it may go some way to removing the natural fear that occurs when considering it as an option.