IVA Help
Anyone considering Bankruptcy may have
experienced fear after reading an article written in The Mail on
Sunday with the headline “Bankruptcy cheats face crackdown”.
But, how much of what was written was in context of the reality of
Bankruptcy as it is today?
The article implied that since The Enterprise
Act 2002 the rise in the number of people going bankrupt was due to
them using the Bankruptcy route as a “Get out of jail free card”.
The assumption being that The Enterprise Act 2002 made bankruptcy an
easy option. However, the writer didn’t take into consideration the
actions the DTI have taken to raise financial awareness and to
ensure better advice is given regarding people’s options when faced
with personal debt issues.
The article gave the impression that one of the
restrictions of bankruptcy was that you could not open a bank
account until you are discharged from bankruptcy. However, there are
infact 40 basic bank accounts, half of which will allow an
undischarged bankrupt to open an account. This in itself indicates
the writer of the article is not fully aware of the effect of
bankruptcy, therefore giving the impression that the article could
possibly be the result of poor research.
The Enterprise Act 2002 (bought into force in
April 2004) was made to give honest people a fresh start in life,
which would be free from the stress of debt. Not for the purpose of
encouraging people to “use insolvency as a way of shaking off
creditors”. The writer implied that the provision, which allows the
IP to request a restriction order on a bankrupt, is hardly used.
Perhaps this is because, people who lodge petitions for bankruptcy
have not gone out to get themselves into huge amounts of debt and
are genuinely unable to repay their debt due to unforeseen
circumstances, rather than fraud, recklessness or
dishonesty.
If an Insolvency Practitioner suspects
fraudulent or criminal behaviour, they will apply for a Bankruptcy
Restriction Order (BRO) for the court to assess and decide what
action to take.
The writer also states that “New” Government
proposals due out in the next few days will make it easier for
creditors to set up plans for repayments, an “Individual Voluntary
Arrangement”. Individual Voluntary Arrangements (IVA’s) have infact
been around since the 1986 Insolvency Act and used by employees and
self employed people.
This only further questions the credibility of
the writer and The Mail on Sunday for publishing such an
article.
What the writer also doesn’t realise is, people
who have failed IVA’s or not able to get an IVA add to the
percentage of people petitioning for bankruptcy.
The worry that this article will have placed on
people is not only unnecessary, but also misleading. The reduction
in the terms of discharge from bankruptcy is supposed to be a
positive change in The Enterprise Act 2002, not a negative one as
implied in this article.
If you have sought advice, and you know you have
no other option than to take the bankruptcy route then you should
not be put off. “Nothing has changed”, as Simon Wiggins of Ask the
Expert informed one of his posters who read the article and was
concerned by it.
If you would like further advice regarding your
financial situation FCL Debt Clinic offer free debt advice which will enable you to see what
your options are regarding resolving your debt problems.
Nicola Bullimore has been working with people
regarding debt issues for a number of years. For more information
regarding debt, please visit Debt Questions
Article Source:http://EzineArticles.com/
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