Bankruptcy > Finding an Alternative to Bankruptcy

Finding an Alternative to Bankruptcy

by: John Mussi

Bankruptcy can have serious, long term effects on your life. If you become bankrupt, you may have to give up valuable possessions and property. Your personal finances will have to be investigated, and restrictions will be placed on future investments.

If you have a steady income and a satisfactory credit rating, you may want to consider these four options with less serious consequences.

Loan consolidation with banks

You may be able to combine all of your debts into one consolidated loan with either your bank or another financial institution. A consolidation loan is always a good idea because your interest rate will be lower than the interest rate on your credit cards, and you will only have to make one payment on your loan each month instead of making many different monthly payments to each of your credit cards.

Informal arrangement with creditors

You could attempt an informal arrangement with your creditors to pay a lesser amount or make your payments over a longer period of time. Often this is done with the help of credit counseling agencies. You may want to discover how your credit rating will be affected before agreeing to such arrangements. Sometimes creditors may agree to reduce your debt or extend the repayment term, but still report you to the credit bureau.

Individual Voluntary Arrangement (IVA)

A third option is an Individual Voluntary Arrangement (IVA). This is a legally binding arrangement between yourself and those you are in debt to. It is Regulated by the Insolvency Act (1986), so you will need the services of a licensed Insolvency Practitioner (IP) to be eligible for an individual voluntary arrangement.

During the set up of your individual voluntary arrangement, your chosen Insolvency Practioner (IP) will draw up legal proposals for you to make an offer in full and final settlement of your debts this could be in the form of a lump sum or regular monthly payments over a period of 5 years.

All interest and charges on your unsecured debts will be frozen. You will be protected from any further action by your creditors. Once the individual voluntary arrangement is successfully completed your debts are effectively written off. The arrangements should be made to the benefit of all those concerned.

The main disadvantage to an IVA is that equity in property may not be completely protected but this is no different from bankruptcy where the Official Receiver retains the right to force a sale up to three years after the bankruptcy.

Credit counseling

A fourth option is credit counseling. There are a number of credit counseling services who will help you consolidate your loans. Before enrolling with a credit counseling service, make sure you inquire about their services and fees. Often credit counseling services are useful in helping you to decide whether bankruptcy is the right option for you.

There are many options to consider when you are in a situation of financial difficulty. Consult with a trustee in bankruptcy, a lawyer, or an accountant for more information.

These are just four options, but many more exist. Talk with a professional before declaring bankruptcy to make sure you have explored all your options.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

Mortgage after Bankruptcy - Bankruptcy Discharged Yesterday? Purchase a Home Today!

by: Lee Seno

So you have been through a bankruptcy and surely have been told to wait at least two years before applying for a home loan. Waiting two long years without any guarantee of being approved for a mortgage after bankruptcy can be disheartening. Fortunately, this advice no longer holds true.

Today, there is a growing realization of the need to offer home loan products that are specifically designed for borrowers with an imperfect credit or financial history. Mortgage programs have been created especially for borrowers who have gone through a bankruptcy. In fact, those with a bankruptcy discharged for even one day may apply for a home loan. That's right, if your bankruptcy was discharged yesterday, you can qualify for a mortgage today!

Now you are probably thinking that although you are eligible, it will be difficult to qualify. The truth is that...

Mortgage after Bankruptcy - Bankruptcy Discharged Yesterday? Purchase a Home Today!

Bankruptcy > Mortgage after Bankruptcy - Bankruptcy Discharged Yesterday? Purchase a Home Today!

Bankruptcy Tips And Helpful Alternatives

Bankruptcy Tips And Helpful Alternatives

by: Dean Shainin

Before you file bankruptcy, it is a good idea to look into other alternatives if at all possible. New bankruptcy laws make it more difficult to file than it used to be.

Why Has Filing For Bankruptcy Doubled?

From the period of 1994 to 2004, filing for bankruptcy has doubled. Bankruptcy filing has spun out of control with consumers being targeted with easy credit. This has become a major cause for bankruptcy cases.

New Bankruptcy Laws?

There is now a new law for bankruptcy that was passed called the ?Bankruptcy Abuse Prevention and Consumer Protection Act?. People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

Bankruptcy Can Stay On Your Credit Report For 10 Years

Filing for bankruptcy can be on your credit for up to a decade. It?s a good idea to look into alternatives for bankruptcy. Buying anything on credit...

Bankruptcy Tips And Helpful Alternatives

Bankruptcy > Bankruptcy Tips And Helpful Alternatives

Debt Elimination & Debt Consolidation Can Work Together

Debt Elimination & Debt Consolidation Can Work Together

by: Drew Harris

Debt elimination has always been my goal. But on this day, when I received the bill for the sudden replacement of the clutch in my car, the VISA bill and word that my daughter needed orthodontics for her teeth, how was I ever going to realize my debt elimination goals?

Does that sound familiar? It?s totally frustrating. It?s very easy to log your spending and identify high interest credit cards to pay off, but what happens when there is still more month left when the money runs out?

In the case of our family, debt elimination was only possible when debt consolidation was achieved by drawing on home equity and refinancing the mortgage.

If we had not gone this route, trying to stay on top of huge debt payments is a slippery slope that can very quickly become serious financial stress.

Consider the fact that Americans are declaring bankruptcy at record rates....

Debt Elimination & Debt Consolidation Can Work Together

Bankruptcy > Debt Elimination & Debt Consolidation Can Work Together

The New Bankruptcy Law -- How Will It Affect Debt Negotiation?

by: Charles Phelan

In April 2005, Congress made sweeping changes in U.S. bankruptcy law that will go into effect on October 17, 2005. It's called the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," and it means big trouble for Americans struggling with debt problems.

What effect will the new bankruptcy law have on the practice of Debt Settlement (also called Debt Negotiation)? Will creditors still be willing to negotiate with consumers seeking to avoid bankruptcy? Will lump-sum settlements for 30%, 40%, 50% still be possible now that this tough new law has been passed?

The short answer is "YES." It will be "business as usual" in the collection industry. People that choose to file bankruptcy will definitely be affected for the worse, as I'll outline below, but those who choose to privately negotiate their way out of debt will notice very little difference. Creditors...

The New Bankruptcy Law -- How Will It Affect Debt Negotiation?

Bankruptcy > The New Bankruptcy Law -- How Will It Affect Debt Negotiation?

Rebuilding Your Credit After Bankruptcy

Rebuilding Your Credit After Bankruptcy

by: Frank Bruno

In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.

Today, bankruptcy doesn?t quite have the stigma it used to. Many of the world?s most successful people have filed for bankruptcy. These people hit rock bottom, and have bounced back to become wildly successful.

To emerge from bankruptcy requires diligence and discipline. In order to get back on your financial feet, you must rebuild your credit.

If you filed a chapter 13 bankruptcy, you had to make your court-ordered payments until the bankruptcy was satisfied. Even though you made great strides financially by doing so, lenders don?t see it quite that way. Lenders don?t consider your bankruptcy payments as a way to rebuild your credit. In fact, the ?rebuilding...

Rebuilding Your Credit After Bankruptcy

Bankruptcy > Rebuilding Your Credit After Bankruptcy

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Bankruptcy

How to Find Lower Interest Rates Using the Internet

by: John Mussi

If you're looking for information about interest rates for a loan and find yourself getting frustrated by not finding rates that are in the range of what you'd like, you might be overlooking a valuable resource.

Since the advent of the internet, various banks and lenders have been working on making the internet a viable medium for banking information and research.

A number of lenders...

Bankruptcy How to Find Lower Interest Rates Using the Internet student loans Finding an Alternative to Bankruptcy

Bankruptcy > How to Find Lower Interest Rates Using the Internet

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