What Is Personal Insolvency and how does it lead to Bankruptcy?
Personal insolvency is a word that describes a person’s financial situation. It refers to a situation in which you are unable to pay your personal bills when they are due. Some of the examples include:
- Credit Card Debts
- Bank accounts that are overdrawn
- Rent that is consistently not paid, or not paid on time
Failure to satisfy financial obligations, contrary to popular belief, does not have to result in bankruptcy. Bankruptcy is when you formally declare that you are unable to repay any obligations that you owe, and it should always be considered the last alternative owing to the negative implications. Bankruptcy can have an impact on your income, job, and capacity to get credit in the future, among other things. As a result, alternatives to bankruptcy, such as personal insolvency agreements (PIAs) and debt arrangements, are getting more popular.
When is the ideal time to file for bankruptcy?
If you are really struggling with your personal finances and can’t pay back your debts, bankruptcy may be the best solution. This is a legal procedure of declaring that you are unable to pay your obligations. In most cases, a person stays bankrupt for 3 years and 1 day after declaring bankruptcy.
What are the consequences of being bankrupt?
Bankruptcy does not relieve you of all debts. Most debts, such as credit cards and utility bills, are covered by bankruptcy, but there is a list of liabilities that are not. This includes court-ordered fines, school loans, and any obligations incurred during the bankruptcy term.
It’s crucial to understand the ramifications of bankruptcy since it can damage your ability to receive credit, restrict you from travelling, and limit your options for some types of work. If you are having trouble with money, getting advice from an expert can help you save money and protect your financial future.
For more information about personal insolvency or bankruptcy, please call our friendly and professional consultants on 1800 462 767. Our bankruptcy hot-line is open 24/7 including weekends.