With the 12 year automatic discharge period cut to 3 years, there are Benefits in bankruptcy as a debt settlement remedy:
Fees for legal advice and negotiation are provided for as part of process.
The stigmatisation is diluted as the Economic Crash is seen as the cause.
Fresh start, the bankrupt’s debts are wiped out.
Protects family home – The Official Assignee (OA) will adopt a pragmatic approach and sell bankrupt’s 50% share of family home to the spouse.
Locks in today’s value – as prices are close to the bottom, now might be the time to act – OA often provides spouse with a further 15% reduction to purchase bankrupt’s share.
Protects future earnings.
However, Debtors will need professional advice on options for addressing financial difficulties and deciding which remedy meets the Debtor’s needs:
Eligibility for a DSA or PIA schemes under the Personal Insolvency Act.
Asset protection /Pension Protection /Future earning protection.
Appropriateness for proposals to banks.
Advice on whether or not debtor is likely to meet proposals and risk factors.
Bankruptcy pitfalls and advice on proceedings.
Negotiating best arrangements for debtor if an arrangement is an option.
Negotiating a write down outside of an arrangement – if debtor has access to a lump sum.