Why an IVA is a Better Option than Bankruptcy in the UK
If you are struggling under staggering levels of debt, you are probably looking for a way, any way, out of the quagmire. The burden of high debt amounts with high interest rates can sometimes seem impossible to break free from the cycle. It can seem that declaring bankruptcy is your only option. However, when you seek bankruptcy advice, you may find out that there are other solutions that may be better for your personal situation. An IVA, or Individual Voluntary Arrangement, can be much better for your credit and quality of life. It is cheaper to execute than a bankruptcy as well.
An individual voluntary arrangement is drawn up between consumers and the places they owe. Usually, the IVA is handled by a third party financial services organization. It is not a loan. The IVA determines the total debt you have incurred, assesses how much you can afford to pay according to your income, and sets one amount for you to pay each month. Unlike in bankruptcy advice, people in an IVA can keep their homes and do not have to liquidate all their belongings. Monthly payments are for a set period of time, normally five years. After that period, any unresolved debt is written off, or wiped clean. That means that you can be debt free in as little as five years and have up to seventy-five percent of your loans completely wiped away.
The IVA will stay on your credit for six years, but it does not have the stigma that a bankruptcy has. It is easier to get a mortgage when you have an IVA on your record as opposed to a bankruptcy. Your credit rating does not suffer as much from an individual voluntary arrangement either. Bankruptcy advice and court costs are much higher than that involved in an IVA.
You can also maintain control of your situation better with an IVA. Home and assets remain within your control unlike in a bankruptcy declaration where everything comes under scrutiny as a method to resolve your debt. Because a monthly payment plan is a part of the IVA, you obviously have to be employed, but gaining and retaining employment is also easier across many sectors with an IVA than with a bankruptcy on your record. IVA versus bankruptcy advice from experts can help show you what decision is best for your family. If it is a possibility, an individual voluntary arrangement will leave fewer financial scars on you and your family.
Spencer Gordan is a finance consultant who is currently researching the benefits of an bankruptcy advice
Processing your request, Please wait....
