The first rule of holes - when you are in one, stop digging!
Denis Healey's commonly quoted metaphor is sage advice for life - when in an untenable position, it is best to stop carrying on and making the situation worse.
So it is with debt - spending your way out of financial difficulties is rarely going to be the solution.
A recent write up of BRI from a now bankrupt debtor said: "After significant changes in my circumstances, BRI were able to alleviate all my concerns and fears with their extensive knowledge of the financial system, explaining how things work, rather than second hand information. They answered all my questions, even those I didn't know I had. Because of them, there is finally a light. Thank you very much!"
So what are the options? There are a number of non-insolvency solutions to a personal financial crisis - rescheduling of debts, debt management plans and informal agreements with some, or all, of your creditors among them. For those with debts below £20,000 and little surplus income or assets there are Debt Relief Orders - wipe the slate clean and be discharged after 12 months in most cases.
An Individual Voluntary Arrangement (IVA) is a formal agreement, for the satisfaction of debts, in whole or part and is binding on all unsecured creditors. It is a method of avoiding bankruptcy, while still being subject to a formal insolvency procedure.
Anyone considering an IVA should ensure that they receive best advice, understand all the options available to them and, in particular, only make a proposal that they are 100 per cent certain they can afford both now and going forward - failure of an IVA is likely to lead to the debtor being made bankrupt.
Despite 'advice' provided by some so-called insolvency advisers; in some instances, bankruptcy is the best method of freeing a debtor from unmanageable debt. It is a formal procedure and often the last option to be considered when all others have been proven to be impossible or inappropriate.
It is possible for an individual to petition for his/her own bankruptcy or a creditor may take action against them. Once a Bankruptcy Order is made, the debtor is required to provide full details of his/her financial life to the Official Receiver, who will assess their ability to make contributions to creditors from assets and/or income.
If you know anyone who is in a financial pickle and needs a helping hand, the team at BRI will ensure they get the best advice for themselves whatever the outcome for BRI. We know that being in a financial hole can be very lonely and we are always pleased to be able to help people with a no-obligation, no-cost leg-up. BRI can still be found at 100 St. James Road, Northampton or you can call on 01604 754352.