If you are considering applying for bankruptcy or an Individual Voluntary Arrangement you will need to find out if you are able to be considered first. The Insolvency Act is in place to help discover if you have many debts which are more than the amount of assets that you own. It is also a way of discovering if your outgoing bills are higher than you income.
You Need to Be Insolvent to Be Made Bankrupt
If you are found to be insolvent then the options of the bankruptcy or the IVA can be considered, applied for and potentially agreed to. If you decide that one of these options might be a good way of solving your financial problems the debt advisors helping you to find a solution will check to see if you are insolvent or not before you proceed.
Potential Options if You Are Only Insolvent in the Short Term
Your current situation will be taken into account, and so will any future foreseeable changes too, as many people find they are insolvent for a short period of time and are able to see a change in their circumstances in the near future. If positive change is foreseeable your debt advisor may recommend that you avoid the legally binding IVA and the bankruptcy option. In these circumstances it is possible that debt management could work which is a far less drastic action ideal to help you get out of debt as quickly as possible.
Seek Professional Advice Concerning Insolvency
Once you have discussed the available options and insolvency with your debt advisor the next steps can be taken to help solve the problems you are facing. The advisor can assist you with your IVA or bankruptcy application, or even help to come up with a plan and manage your debt consolidation or management options.
It is worth remembering that although debt advice should always be free, if you choose one of the solutions there could be fees and charges applied. All of the fees will be disclosed to you when you have a consultation so you are not left in the dark about the financial situation concerning your debt solution.
Insolvency, bankruptcy and IVA’s can all be discussed for free with expert debt advisors.