Once you can no longer pay your debts and you have to file for bankruptcy, this procedure will remain on your record for a ten-year period. This will unfortunately create a certain negative status for all individuals seeking further credit, employment or any other financial projects.
This does not mean that you no longer have any alternatives, but it will generate quite a few obstacles for future projects. Due to these disadvantages, it may at times be a good idea to seek the advice of a bankruptcy attorney, who will help you consider offering a compromise with your creditor. This may be an informal arrangement, where you agree to pay off your debts over a determined period of time. Keep in mind that your creditor may at any time decide to ask for full payment of your debt and obligations, for this agreement is not legally binding.
You may also decide not to pay your creditors directly, and opt for an administration order. In this case you will be paying your debt directly to the court, who will be acting as a go-between. Unfortunately not all debts can take advantage of this procedure, for debts cannot exceed £5000. You will also need to provide a regular income to prove you can pay regularly each month. Should you miss a payment, the court will immediately cancel the order, and you will then be subjected to the restrictions of a bankruptcy procedure.
Another option for bankruptcy is IVA. With the aid of an insolvency practitioner you can agree to make a proposal to your creditors in the presence of the court, promising to pay off part or all your debt. For this procedure you will have to find an insolvency practitioner, who is registered with the court. Once you have applied for insolvency the court will issue an interim order, to stop creditors from proceeding with bankruptcy petitions against you.
It is always best to seek the advice of a bankruptcy attorney or other professional expert in liquidation management and insolvency, to find the best possible solution to your personal bankruptcy problem.