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What Are The Alternatives To Bankruptcy?
Question:
What are the alternatives to bankruptcy?
Answer:
The alternatives to bankruptcy are:
Informal arrangement / debt management plan – You could consider writing to all your creditors to see if you can reach a compromise or ask a professional debt management plan company to contact your creditors on your behalf and work out a suitable repayment plan.
Individual voluntary arrangement or IVA - This is a formal version of the previously described arrangement. You would need to apply to the court with the help of an authorised insolvency practitioner. He or she would supervise the arrangement and pay your creditors in line with the accepted proposals.
Administration orders – If one or more of your creditors has a court judgment against you and if your total debts are £5,000 or less, the county court could make an administration order. Under the administration order, you make regular payments to the court, which will then pay your creditors. While you are paying the administration order, your creditors can’t take any further action against you to get their money, without asking the court first. Also, you will not have to pay any interest on your debts. You will have to pay a fee for an administration order, but this will be added to the money you already owe and not charged separately.
Debt Relief Order or DRO: another form of insolvency, but an alternative to bankruptcy if you have debts of less than 15K, no assets and a surplus of income each month that is £50 or less.
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If you have a bankruptcy question you’d like to ask, just ask using this online form. All help is free.
Source: What Are The Alternatives To Bankruptcy?