Personal insolvency occurs when an individual is unable to pay their debts as they become due. This can be a result of various factors, including job loss, unexpected expenses, or overspending. When someone is facing personal insolvency, it can be a stressful and overwhelming situation.
There are several options available for individuals who are struggling with personal insolvency. One option is to enter into a debt agreement, which is a legally binding agreement between the debtor and their creditors to repay a portion of their debts over a set period of time. Another option is to declare bankruptcy, which involves a legal process where an individual’s assets are sold to repay their debts.
It is important for individuals facing personal insolvency to seek professional advice to determine the best course of action. This can include speaking with a financial counsellor, seeking legal advice, or consulting with a licensed insolvency practitioner.
In addition to the financial consequences, personal insolvency can also have a significant impact on an individual’s mental health and wellbeing. It is important to seek support from family and friends, as well as professional support services, to manage the emotional impact of personal insolvency.
While personal insolvency can be a difficult and challenging experience, it is important to remember that there are options available and that seeking help is the first step towards finding a solution.