Bankruptcy is on the Rise- Is There an Alternative?
Experts are warning that the number of bankruptcies will continue to rise in the UK. This prediction follows the announcement of figures for the fourth quarter of 2005 which were at an all time high.
According to official statistics 13,501 bankruptcies were filed in the fourth quarter of 2005. This figure represents an increase of 11% up on the previous quarter and even more strikingly it was 38% higher than the same period in 2004.
However, these figures only partly show the rue state of affairs. Britain is facing a personal debt crisis and for every person who is declared bankrupt, plenty more are suffering from serious debt which blighting the quality of their lives.
The widespread nature of personal debt is largely a result of how easy it is to obtain credit. Consumers are encouraged to borrow more than they can afford so that they can spend today and worry about how to pay for it tomorrow. In other words, consumers want instant gratification and would rather get into debt and have the products they want than do without or save money.
The other reason that bankruptcies are on the increase is the changing attitude towards it. Ever since the Enterprise Act of 2002 reduced the period in which people could be discharged from bankruptcy, it has been seen as an easy way to get out of debt.
This perception is very far away from the truth however. There are numerous disqualifications, restrictions and stigmas associated with bankruptcy. And these disadvantages have long term and far reaching consequences.
Consumers who are considering bankruptcy as a way of sorting out their debt problems would be well advised to consider the alternatives. In 1986, the government introduced IVAs as an alternative to bankruptcy which would benefit both debtors and creditors.
An IVA is a good alternative to bankruptcy because there are no fees or legal proceedings involved with it, unlike with bankruptcy. Moreover, an IVA offers a greater repayment of the debt than would otherwise be achieved if the debtor were made bankrupt. For these reasons an IVA is a good alternative to bankruptcy from a creditors perspective.
From the debtors perspective, an IVA is a good alternative to bankruptcy because it does not have any stigmas of disqualifications associated with it. Additionally:
Monthly re-payments are based on what the debtor can actually afford to pay
In most cases, a debtor can keep his/her car with an IVA
With an IVA as much as 80% of the debt is written off completely
An IVA enables debtors to clear their debts within five years
Bankruptcy is on the increase because of the growing amount of consumer debt and the mistaken belief that it is an easy option. Although the UKs debt problem is not going to vanish any time soon, debtors would be well advised to consider alternatives to bankruptcy of which an IVA is possibly one of the best ones.
Clear Start, the National Consumer Debt Advice Service offers free IVA advice: Alternative to Bankruptcy
Is There An Alternative to Bankruptcy and Debt?
The UK consumer debt problem is rocketing out of control. Total consumer debt has passed the 1 trillion mark and now stands a...
Using a Debt Settlement Company as a Bankruptcy Alternative
With the number of home foreclosures on the rise, people are finding themselves deeper in debt than ever before. Individuals ...
Alternatives for Filing Bankruptcy
The term bankruptcy conjures up an image of someone publicly disgraced and broke. When in deep debts, one might feel that ban...
Avoid Bankruptcy, Set Up an IVA
Although declaring yourself bankrupt is a way of resolving your debt issues, it should be avoided if at all possible.Bankrupt...
Overwhelming Debt? Bankruptcy May Be Your Way Out, But Maybe Not
Things are bad, really bad. They have to be for you to be considering bankruptcy. Its true that bankruptcy can wipe away your...
Handling Bankruptcy in Scotland
Scotland like many other UK countries has seen it bankruptcy rates rise. This rise may be attributed to the fact that there a...
Tips for Avoiding Bankruptcy
Although bankruptcy might seem like an easy answer to your financial problems, it is best avoided if at all possible. After a...
Evaluating The Bankruptcy Cost
If you are planning to file for bankruptcy, you will have to keep several things into your careful consideration bankruptcy ...
Are There Any Alternatives to Bankruptcy?
If you are facing serious debt problems then you might have or be considering filing for bankruptcy. If this is the case you ...
IVA - A Government Introduced Alternative to Bankruptcy
In the third quarter of 2006, 15,416 people were declared bankrupt compared to just over 12,000 over the same period in 2005....
How to Asses the Filing Bankruptcy Cost
Assessing the filing bankruptcy cost is an important step if you are on the way to file a court petition for bankruptcy. Sinc...
Avoid Bankruptcy If You Can
If you can help it, avoid bankruptcy. Doing so could save your credit and not require you to undergo credit counseling. Thank...
Understanding Types of Bankruptcy
People who are heavily in debts and are in no position to pay them back opt for filing bankruptcy as the last alternative. Th...
Alternative Down Comforters
Alternative down comforters have come to light for many reasons. These reasons could be because of taste or necessity, such a...
Bankruptcy and Your Credit
Bankruptcy and credit are directly linked to one another. Credit is how many people run into trouble with their finances, an...
Bankruptcy - When is Filing For Bankruptcy a Good Choice?
Financial stresses and strains can be hard on a person or a family. When bills get tight, the stress levels in a home reach e...
How to Avoid Bankruptcy
Bankruptcy is a legal way to offer folks with high interest debt a fresh financial start in life. In case you are considering...
Avoid Bankruptcy! Do Not Live The Rest Of Your Life In Regret
Most people who have a large amount of debt that they are struggling to pay off at one time or another have considered the op...
The Basics Of Bankruptcy
Are you facing financial troubles? Have you tried to alleviate your debts by working with the companies, but not succeeding?...
Bankruptcy Forms Processor - An Excellent Way To Make The Bankruptcy Proceedings Simple
If you use the bankruptcy forms processor to help with the filing procedure for your bankruptcy case, you will find that your...