To Clear Debt, many individuals opt to file for bankruptcy. However, before a person does so, he or she needs to consider other options. This does not mean bankruptcy isn’t the right option for some. Individuals who find they have no other options always have this choice available to them.
What Does Bankruptcy Involve?
When a person finds they cannot clear credit cards and other debt, they may opt for bankruptcy. With this solution, a person no longer has to repay their debt and creditors will be prohibited from taking further legal action. This does not mean the debtor walks away with no repercussions, however. Bankruptcy has far-reaching consequences that need to be taken into consideration.
The Benefits of Filing Bankruptcy
Individuals who file for bankruptcy find they no longer must deal with their creditors. The court takes on this task and handles all proceedings. Once the bankruptcy has been completed, which usually takes a year, most of the remaining debt is eliminated, although there are exceptions. Many people will be able to keep some household items and personal goods or most of them.
The Drawbacks of Doing So
Assets may need to be sold to satisfy debt when a person chooses to file for bankruptcy. Monthly payments may be required for a period of up to three years, and the bankruptcy remains on the debtor’s credit file for six years. Any person who chooses to search the insolvency record is able to see that a person filed bankruptcy and this can have a negative effect on certain individuals. They might find it impacts their career. Furthermore, certain debts, such as child maintenance arrears, will not be included in the bankruptcy, and these bills must still be paid.
Fees Involved With a Bankruptcy
People often wonder how a person who cannot afford to pay their debts is able to file for bankruptcy. There is a fee to do so, yet it may be waived with the help of a Debt Relief Order. Furthermore, there are companies that can help with the process, and they also charge a fee. Be aware of this, and research all available options.
Seek debt advice before determining if bankruptcy is the right option. Some individuals will find it is the only solution that will work for their needs. Others, however, may find a debt management plan or an individual voluntary agreement better meets their requirements. However, there is a debt relief plan for everyone. It’s simply a matter of finding the one that works for you.