Bankruptcy Reader

Guess what, the latest reports doing the rounds is that bankruptcy filings have fallen way below normal. That’s what figures say but some bankruptcy lawyers seem to be telling another tale altogether. They claim to be seeing more people filing for bankruptcy than ever before! First-quarter bankruptcy petitions are supposed to have dropped nationwide to the lowest level in 20 years. This is supposed to be thanks to the much-stricter law that requires consumers to complete credit counseling before being eligible for bankruptcy.

In Greater Sacramento, which seems to be following the same pattern as the nation, bankruptcy filings dropped 76 percent in the first quarter and Chapter 7 liquidations fell 80 percent. And, believe it or not, bankruptcy lawyers seem to be feeling the pinch. By some estimates, as many as three out of every 10 bankruptcy lawyers in this area are shifting to other practice areas or leaving the field.

As of now, most Americans have only two choices - file for bankruptcy or enroll onto a creditor controlled debt management plan. In the UK, while bankruptcy is an option, many consumers can also seek to enter into a legally binding contract with their creditors called an Individual Voluntary Arrangement (IVA), which is supposed to be a ‘better than bankruptcy’ commercial proposal put forward by an individual to their unsecured creditors. Livearticles.com reports:

Typically IVAs constitute a 5-year monthly repayment proposal based on the realistic affordability of the individual. A typical proposal would be offering a minimum of 25% of the debt outstanding to be repaid over a 5-year period.

Read more: Can The USA Learn From The UK When It Comes To Bankruptcy