It’s always a wise move to explore the options available to you before you decide to declare personal insolvency. Whilst you might find that you really have no choice but to declare insolvency you will, however, generally find that there are a number of options to look into, like personal insolvency and debt settlement arrangements for example, of which there are a few varieties to take note of.
What does declaring insolvency involve and when should I declare it?
Declaring insolvency can prove to be a lengthy process and one that should be avoided if at all possible. However, many individuals find themselves in a position in which they’re unable to honour their debt obligations to their creditors and the last recourse of action available to them is to declare personal insolvency, a process which is also known as personal bankruptcy.
Therefore, you might find that you need to declare insolvency when you have exhausted all your other options – personal and debt settlement arrangements like IVAs (Individual Voluntary Arrangement), etc – and you have no other recourse of action than to seek a court declaration that confirms your inability to repay your creditors and enables you to start anew financially without your old debts.
As mentioned earlier, declaring personal insolvency is hardly a situation to take lightly and therefore other recourses of action should first be pursued. However, if you have exhausted all your other options and there really is no option remaining besides declaring personal insolvency you’ll need to have access to legal counsel.
Declaring personal insolvency – Why you need legal counsel
The process of declaring personal insolvency is generally quite a complicated one and therefore represents a situation for which you’ll require access to legal counsel, provided that accessing legal counsel isn’t mandatory which it is in many jurisdictions around the world. Therefore when preparing to declare individual insolvency you’ll need Gibraltar lawyers with direct and extensive experience in personal insolvency cases by your side. Whilst there will be fees incurred by accessing legal counsel for your personal insolvency case, these legal fees are generally quite reasonable and the assistance of legal counsel could prove to be the difference between acceptance and rejection of your insolvency petition.
Avoiding filing a petition for personal insolvency
Depending on how seriously your debt commitments have got out of hand there are generally a few options available that would be a much better choice than filing a petition for personal insolvency. This, however, will depend on your country of residence because laws governing personal insolvency will naturally differ from country to country, and often between jurisdictions within national borders, of which a good example is the US.
Individual Voluntary Arrangement (IVA) – This is an alternative to filing a petition for personal insolvency, one that’s available to UK residents. To apply for an IVA you needn’t arrange legal counsel, though this is often advisable, but rather contact one of the many firms that are approved by the Government to handle IVA arrangements between debtors and their creditors.
Personal Insolvency Agreements (PIA) – This arrangement is available in several countries, like Australia and Ireland, and involves an agreed settlement and/or restructuring of secured debts up to a certain amount of money (3 million Euros in Ireland) over a period of up to 6 years.
Options like IVAs and PIAs are certainly worth looking into before you decide to declare personal insolvency; however, if there’s no other recourse of action available to you besides filing for personal insolvency, ensure you have an experienced solicitor by your side to avoid a rejection of your petition for personal insolvency.
About the Author:
A company with a number of experienced lawyers in Gibraltar, Cruz & Co is a leading law firm that provides services such as litigation management, property conveyancing and dispute resolution.