The true definition of insolvency is when someone is unable to pay their debts. No one has to stay insolvent and there are a few options available to help. The two more popular options are to get a higher paying job or get on a budget and spend less. The following are a few tips to help those who are currently insolvent.
If you’re out of options the only one that still remains is to claim bankruptcy. Claiming bankruptcy should be left as a last resort since the effects of bankruptcy can last between 7 to 10 years.
Another option for those in the UK, Wales and Scotland are IVA’s. While IVA’s can be a good alternative they can be more expensive than claiming bankruptcy. Recently another alternative has become available and that is debt relief orders. There are several requirements that must be met before anyone can apply for debt relief orders such as:
- You cannot own any type of property or be a homeowner
- The total amount of debt cannot be less than £15,000
- Your total amount of assets must not be more than £300
- Your income after typical bills and expenses less than £50
- Live in Wales, England or the UK for the past 3 years
- Have not applied for a DRO in last 6 years
Once you have applied for a DRO creditors must stop contacting you within that same year. Most people are usually debt free within 6 years.
There are a variety of additional options available for those that are insolvent to become debt free. You can also contact a financial advisor to help you find a solution that will best suit your needs. You can also find additional options by searching on the Internet. There you can find useful information that will help you decide which solution is best for you. All you need to do is search under “insolvency” to find websites that can guide you in becoming debt free.
If you prefer to find a financial advisor to help you through the process be sure you find one that is knowledgeable about insolvency and is experienced in finding solutions according to each individual’s needs. Every individual that is insolvent became that way due to personal circumstances. Each person’s set of circumstances is different so a financial advisor must be experienced in knowing which solution is the best one. Research each financial advisor thoroughly before making a final decision. Most financial advisors have websites where you can read more about their background and their professional experiences. Some even have a contact section where you can ask a question about insolvency free of charge. Some also have a free consultation session where you can discuss your case and ask any questions you have about insolvency as well as their rates to take your case.
Being insolvent makes it difficult to move through life and obtain what you need for a normal lifestyle. With all the options available no one has to stay that way forever.
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