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If you would like to discuss bankruptcy alternatives with one of our friendly debt specialists, then please 0800 520 0923 or contact us online. We can help you assess your situation and find the right debt reduction plan for you and if possible provide an alternative to bankruptcy.
This page has a more facts about bankruptcy including bankruptcy alternatives. There are alternatives to bankruptcy such as an Individual Voluntary Arrangements (IVA), which are increasing in popularity as a way of avoiding bankruptcy and a less drastic Debt Management Plan.
For information on how a debt management plan can help you, click here.
Depending on your personal situation and the level of debt, there are alternatives to consider before applying for bankruptcy. If the consequences of liquidation have caused pause for a rethink, then the information below should help you answer the question: Is bankruptcy necessary?
Options include:
An IVA could help you avoid bankruptcy and allow you to keep your home and assets. Through and informal arrangement that must be supervised by an insolvency practitioner, you can expect you be debt free in 5 years. Visit our IVA section for more details.
Debt relief orders are a new government intiative to help the poor of society reduce or clear debt. People with no assets, low income and who do not own their own property can now access debt relief when previously they found themselves ineligible for IVAs, DMPs or Bankruptcy.
Borrowing is another potential debt solution. Obtaining a loan to restructure you debt can help you avoid bankruptcy - on condition your loan is for clearing debt and not for purchases.
Restructuring your debt can make monthly repayments more affordable, allowing you some extra breathing space. You may still be able to take out a loan even if you have experienced difficulty in securing credit. For more details on the types of loans available to you, visit our loans page.
If you have not done so already, writing to your creditors can offer a simple solution to you debt problems. Do not be deterred by the level of debt, a creditor may be willing to reach an agreement to avoid any unnecessary procedures. Be aware, this is an informal arrangement so you could be asked to make the payment in full at a moment’s notice. Reaching a compromise with your creditors could offer you an alternative to bankruptcy, but do consider other legally binding options such as those previously mentioned.
If you have at least two creditors who have taken a court judgement against you for a debt less than £5000, you may be able to obtain an Administration Order. The Order would be obtained by a court to cover the debt with your creditors and prevent them taking action against you (for the duration of the Order).
You would be required to make monthly instalments to the court, which would take a 10% direct deduction to cover handling costs. There would be no additional court fees.
If you fail to make the payments, the Order can be revoked leaving you at the hands of the creditors. However, if you are struggling to make the payments due to a change in circumstances you can have your agreement reviewed by the court.
You can apply for an Administration Order by completing form N92 at www.hmcourts-service.gov.uk
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