How to Invest Today

It is hard for anybody who becomes insolvent. It shows in no uncertain terms that your money management skills are not up to scratch and you can’t meet your commitments financially anymore. In the past becoming insolvent was just a step on the path to becoming bankrupt, nowadays it is not as certain.

By introducing legal alternatives for the high number of people suffering insolvency, the UK Government was able to solve the high number of bankruptcy rates in the country. The two solutions that the government introduced were the IVA (Individual Voluntary Arrangement) and the Debt Relief Order. Even with these legal solutions available, not everyone facing insolvency is eligible and bankruptcy is the only choice.

The most difficult aspects of declaring bankruptcy is the social stigma surrounding it and admitting financial failure. Amongst older generations who never experienced high amounts of credit and debt, bankruptcy is regarded with particular dislike.

Information about those who are made bankrupt is also made readily available to the public, making it impossible for people to hide. Up until very recently, bankruptcy cases would automatically appear in the local press. Those that are considered of ‘particular importance’ to people in a certain area still do. However not every case is published in local press these days. All national cases are still published in London Press, however, and the information about bankrupts is available freely online through the Insolvency Service. Bankruptcy also stays on your credit record for at least 6 years and longer in cases where long term clauses have been stipulated, making it almost impossible for the individual to obtain further credit.

Bankruptcy is definitely something that should be the last resort if somebody has financial trouble. There are many long term issues it can cause, and the social stigma is almost as bad as the financial problems!

Residents of Scotland seeking an alternative to bankruptcy are not eligible for IVA. The Scottish equivalent are Trust Deeds.

categories: IVA, trust deed, bankruptcy, finances, finance, personal finance, insolvency