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  1. #1

    Consumer Credit Researcher

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    Lightbulb Insolvency and formal debt solutions

    In many cases, it is possible to deal with your debts by either challenging them or coming to an arrangement with your creditors. However, there are times when a formal debt solution may be more appropriate. Unlike informal arrangements, formal solutions are legally binding. This means your creditors can no longer take further action to recover their money and at least part of your debts will be written off, however, it may also mean losing control of some of your assets and acquiring certain obligations for a period of time. Insolvency is a matter of public record and can have an impact on your current and future employment as well as limiting your options when it comes to finding a place to live.

    Formal solutions include:
    • Bankruptcy
    • Debt Relief Orders (DROs)
    • Individual Voluntary Arrangements (IVAs)

    It is important to explore all the alternatives and get qualified advice before opting for a formal solution.

    I am a Researcher specialising in Consumer Credit and I'm here to assist with any concerns or queries.


  2. #2

    Consumer Credit Researcher

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    Lightbulb DROs and bankruptcy

    DROs and bankruptcy have some similarities but there are also significant differences:
    DRO
    Bankruptcy
    Has a much lower cost, just a 90 fee. 525 for managing the bankruptcy. 180 for court costs.
    There is no option for remission of the 90 fee. The 525 deposit has to be paid by everyone but you may qualify for remission of the court fee.
    Debtors need to apply through an approved intermediary. Debtors can apply for a bankruptcy order themselves, without going through an intermediary.
    Only a debtor can apply for a DRO. Bankruptcy can be petitioned by creditors.
    Creditors can object to a DRO. Creditors cannot object to a bankruptcy order being made.
    A DRO can be revoked if the debtor's circumstances change or improve. A bankruptcy order cannot be revoked if the debtor's circumstances change.
    Control of assets is not transferred to the official receiver. The official receiver takes control of the debtors' assets and some may be sold.
    No requirement to make income payments. Depending on your income, you may have to make payments under an Income Payments Agreement (IPA).
    Restrictive criteria regarding maximum amounts of debt, income and assets to qualify. No upper limits for debt, income or assets.
    A DRO only releases the debtor from those debts included in the application. Releases the debtor from all their bankruptcy debts whether they are listed or not.
    A DRO is an administrative act. A bankruptcy order is a judicial act.

    I am a Researcher specialising in Consumer Credit and I'm here to assist with any concerns or queries.


 

 

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