Making the decision about bankruptcy was never going to be easy. It required a good understanding of the benefits and consequences of bankruptcy and bankruptcy alternatives. Why bankruptcy alternatives? Bankruptcy may not be the best route if it can be avoided.
It was critical to seek advice before embarking on my journey. I needed to know that it was my best option and what the effect on my life would be. I sought the advice of a solicitor, primarily because of the business complications.
So what were my options?
- Do nothing and let the business continue in the hope that it will perform better than it has previously and repay the creditors leaving me without any liability.
Given that I strongly believed this was unlikely I decided against this option. It was my view that for every day the company continued to trade it would be another day closer to bankruptcy and yet another day I would have regretted not taking action sooner. Burying my head in the sand rings a bell – especially considering the struggle with my personal debt! - An Individual Voluntary Arrangement.
Putting a proposal to the creditors to repay a percentage of the debt was not an option for me. I was unemployed and hence had nothing to offer. Neither did I have any assets. An advisor will usually suggest an IVA to help you avoid bankruptcy - Bankruptcy.
Given that my personal objective was to wipe the slate clean and avoid problems coming back to haunt me in a few years bankruptcy seemed to be the best option.
For many there are other bankruptcy alternatives to help avoid bankruptcy. Examples include:
- An informal arrangement. Writing to your creditors and making an offer of payment that is timetabled and within your budget could help you reach a compromise with the creditors. Whilst this arrangement is not legally binding it may help you avoid bankruptcy.
- An administration order. If your total debts do not exceed £5,000, you have a regular income and have one or more county court judgements against you this court based procedure may help to repay the debts.
Before finalising my decision though I needed to research further and ensure that I was happy with the effects of bankruptcy and considered all the alternatives carefully. Equally important was looking at the various options and discussing with Miss Piggy.
The best decision I made when facing this debt problem was to seek advice. Much of the worry, stress and uncertainty was taken away. Better still I managed to resolve my problem in the best way possible so I could start living my life again!
