Bankruptcy vs IVA
Although it may seem surreal and serious, if you are in this position, you need to confront and deal with it. You have accrued a certain level of personal debt and you may be unsure as what to do but there are options. The fact is that many people have been and are currently in your shoes. Two of the more common routes for people in this situation are the Individual Voluntary Agreement (IVA) and bankruptcy.
Bankruptcy is a word which strikes fear into the hearts of many in this situation but the actual process and result are neither as painful as you may imagine. It occurs instantly. You place it into the hands of an official receiver or individual trustee who will, from then on, control your assets. For those who have only a small amount of assets, this may be the best route to take. They will also freeze your bank accounts.
The main benefit of bankruptcy is how long it stays in place. It usually lasts for a year usually whereas IVAs can last for up to several ears. Bankruptcy also sees all debt written off but with an IVA, it is typically 75%.Your local newspaper will print your status of bankruptcy so that your creditors can see that you have indeed been declared bankrupt.
The terms of an IVA are dependent upon the situation of the individual. They typically run for five years but once that period is over, your debts are written off. The period, however, can be less than five years and the payment structure can vary from person to person. Usually though, the IVA supervisor accepts a monthly payment figure which is then paid to the creditors accordingly.
IVAs don’t have the same connotations that bankruptcy does. They will also not likely appear in your local newspaper. You will remain fully in control over your assets and there will be less negative effects upon your credit rating. Typically, interest on debts is frozen and a maximum of 75% debt is written off. This relies on you being able to show proof that you receive you having a steady income.
Find out if an IVA could help to solve your financial problems.
