Professional Hong Kong Debt Restructuring Services

Bankruptcy is not considered good or bad; it is a way for honest people and companies to

protect themselves when they find they cannot repay their debts. When you file for bankruptcy, instead of seeking debt restructuring services, you do so via a legal process. While you become free of your debts, there are other consequences to consider:

• The court will declare that you are incapable of repaying your debts. The Official Receiver then becomes the provisional trustee of all your assets and can decide how your property and other assets are distributed among your creditors.   
• You will be deemed bankrupt for four years (five years if you have been bankrupt before).
• You cannot make significant investments like buying a car or a house.
• You cannot apply for other loans.
• You might lose your provident fund to creditors to whom you owe money.
• Your bankruptcy status is noted on your public records.
• You won’t be able to serve as a company director or operate any business while bankrupt.

Typically, debt restructuring involves getting lenders to make loan repayment easier by reducing a loan’s interest rate or extending the due date.

All debt restructuring plans have something unique to offer, depending on what benefits you would like to avail yourself. IVA is fantastic for those willing to go through the legal system, while the DRP does not require you to go through the legal system. The IDRP is excellent for those who want to pursue a more direct debt restructuring solution that involves negotiations with the biggest creditor.

Although very similar, there are critical differences between the two debt restructuring Hong Kong methods. While both are forms of debt restructuring, the former is legally binding, while the latter is not legally binding.

Also, DRP is usually much more straightforward than the IVA, plus it gives you the debtor a lot of control when you apply for this type of debt restructuring in HK.

Money that is spent on hiring a lawyer for IVA can be saved with DRP. Plus, the latter method does away with courts, lawyers, court meetings, and creditor meetings.

If you work in a sensitive industry like finance or the disciplinary forces, you can be sure that your employees won’t be notified of your inability to repay your loans. Your job will be safe. However, IVA does not guarantee your employees will not be notified of your debt restructuring in Hong Kong.

Even a strong business can face short-term working capital challenges during an economic downturn. Debt restructuring plans must be considered when all else fails and prospects of corporate bankruptcy loom over the company.

Both debt restructuring and bankruptcy help you tide over your debt repayment problems. Debt restructuring in HK provides a less expensive alternative to bankruptcy when you are in financial turmoil. Unlike bankruptcy, which affects both the borrower and the lender, a debt restructuring in Hong Kong can benefit both the borrowing and the lender.