Majority of clients go for bankruptcy when they find their debts are out of control. You may also have thinking of fresh start if current financial situation is not efficient to make payments in time. There is no doubt bankruptcy will eliminate all existing debts but you should also know that it will left you in a poor credit situation with no valuable assets or option to manage finance. So, before considering bankruptcy as repayment solution, you should consider other available alternatives to find solution for your debt repayments.
There are less expensive informal agreements that will help to make payments faster. These informal options will not bind you in legal agreement and you can make any change in repayment schedule at any time. You will just need to present a proposal to your creditors for new lower payments each month at some flexible repayment terms. If your creditors accept the proposal then you can make your payments accordingly.
In case of formal options, you will bind with legal agreement however; flexible repayment terms and you will need to make your payments according to that plan. Debt relief order or DRO is a formal option of debt repayment. You can select this repayment option if outstanding debts are less than 15,000. There are also some other associated terms for this like assets value should be less than 300. It is an option in which your repayments and interest rate will be frozen for 12 months period.
Other alternatives to handle huge debts are IVAs and bankruptcy. If total debt amount is more than 15,000 and from multiple lenders then you may consider IVA. Bankruptcy is ultimate solution of debt problems where your financial status is completely unable to cover payments. Debt management plan and trust deeds are other available options that you can consider as per your financial situation and debts.