Life is truly a series of ups and downs. No one can predict with a hundred percent certainty what tomorrow will bring. This is exactly why keeping your finances in check and being smart with your savings is important. When there is an imminent emergency, there are several avenues you can turn to. But, as we are seeing in this COVID-19 pandemic, the institutes catering to emergencies of the general public are choked and there is a limited number of resources available for you to partake in. The most important step you can take in this situation is to make a pact with yourself that you will never let yourself be financially vulnerable. This means taking many hard decisions and giving up many things you might keep very close to your heart.
One of these difficult financial decisions is declaring bankruptcy on your debts. This option might seem ill-advised and hasty as compared to other options available in the market. Of course, DMP and IVA seem rational when compared to bankruptcy in any circumstance. You get to keep a few of the assets and you can avoid most of the annoying dealings with the creditors. But what many people fail to realize is that IVA and DMP setup also causes significant charges which you won’t be able to afford if you have zero personal savings or disposable income. Bankruptcy remains the only valid option. The label of being bankrupt is hard to swallow but one must be strong in their conviction.
With a bankruptcy, you can reclaim your credit score in one or two years. It gives you a chance to rebuild from the ground up and make sure you have enough funds to restart your life. In bankruptcy, the creditors have no right to any repayment. Your assets and funds, however big or small they may be, are used to settle the debts. This works in favor of those with no sizeable assets and high amounts of debt.
Don’t take the step of declaring bankruptcy, consult IVA talking to an expert financial consultant first!