As many as 100,000 bankruptcies are predicted for 2006 but we believe that in many of these cases, people are entering into bankruptcy without sufficient knowledge of either the risks involved or the alternatives.
(PRWEB) July 16, 2006
Bankruptcy is on a steep rise in the UK. Part of the problem is a misconception that going bankrupt represents a soft option when dealing with serious debts and insolvency, say debt help experts The Debt Counsellors, who are urging people with serious debts to consider the Individual Voluntary Arrangement as an alternative.
The Enterprise Act of 2002 made it possible to be discharged from bankruptcy in less than 12 months and The Debt Counsellors claim that a result of this is that many people are under the misapprehension that going bankrupt is an easy way to wipe out their debts.
However, as the debt advice organisation points out, bankruptcy carries with it a serious risk to key assets as well as restrictions regarding business activity and credit.
The Debt Counsellors also believe that many people enter into bankruptcy without being sufficiently aware of the alternatives, such as the Individual Voluntary Arrangement (IVA) which avoids many of the risks associated with bankruptcy and allows the debtor to continue earning whilst paying off a reduced debt over five years.
John Porter, a senior counsellor with The Debt Counsellors, said: "The last quarter's bankruptcy statistics showed a year-on-year increase of 38%.
"As many as 100,000 bankruptcies are predicted for 2006 but we believe that in many of these cases, people are entering into bankruptcy without sufficient knowledge of either the risks involved or the alternatives."
Porter adds: "We are urging people to get professional debt counselling on their situation before making a firm decision. The Individual Voluntary Arrangement is a potential way to avoid bankruptcy and a debt counsellor will be able to give advice on whether it is viable in an individual case."
For more information and advice on bankruptcy, insolvency and the Individual Voluntary Arrangement, visit http://www.debtcounsellors.co.uk