Can a lawyer help you avoid bankruptcy?

Bankruptcy can be obtained in two ways. You can voluntarily petition the court for bankruptcy or a creditor can petition the court for your bankruptcy if you owe them more than £750. Before voluntarily petitioning for bankruptcy, it is highly advisable to obtain legal advice from a specialist solicitor. It also is advisable to obtain legal advice from a solicitor as soon as you are aware that a creditor has started bankruptcy proceedings against you. Bankruptcy has serious repercussions and is not always suitable for every situation where debts cannot be paid. There are alternatives to bankruptcy and a lawyer can advise you on these to help you avoid bankruptcy.

One alternative is a Debt Relief Order (DRO). A DRO can provide you with debt relief if you meet the conditions. You must owe less than £15,000 and not own your home. In addition, you must have little or no surplus income or assets (your disposable income after tax, national insurance contributions and normal household expenses must be £50 or less), and you must not have been subject to another DRO within the last six years. A DRO lasts for 12 months, during which your creditors cannot take any legal action to recover their debt without the permission of the court. After the 12 month period, if your circumstances have not changed, you will not have to repay the debts included in the DRO.

Another alternative to bankruptcy is an Individual Voluntary Arrangement (IVA). An IVA is an arrangement between you and your creditors that is administrated by an insolvency petitioner. An IVA will detail an arrangement that allows you to pay back your debt in a way that you can manage. You must ask the court for an interim order to prevent your creditors from petitioning for your bankruptcy or taking other legal action against you. Then the insolvency practitioner will present your plan to the court and then the creditors must vote on whether or not to accept the proposals.

Other alternatives include administration, informal arrangements with creditors and arrangements with family members. For further legal advice on avoiding bankruptcy, you are advised to speak to a specialist solicitor. A solicitor will assess your situation and provide you with legal advice suitable for your circumstances.

Article Source: http://casinoarticles.us

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