Bankruptcy Or IVA - Which Is Best ?

Released by: Myvesta UK

Article discussing debt strategies comparing the IVA to bankruptcy.

Email: info@myvesta.org.uk

Keywords: IVA , Bankruptcy, Individual Voluntary Arrangement

Update Date: 8/15/2006 11:54:14 AM

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Descrption:
Bankruptcy Or IVA - Which Is Best ?Should I Consider An IVA Or Petition For Personal Bankruptcy?

Ultimately the decision to opt for an IVA or to 'bite the bullet' and petition for your own bankruptcy is one of of personal choice.

Essentially, the IVA as a strategy should be considered as a formal alternative that will enable a person to avoid the stigma and, very often, the intrusiveness of the bankruptcy option. It is important however that a person examines all of the available options in some depth before deciding which strategy is best for them as an individual.

The Individual Voluntary Arrangement is for most people a much easier and less stressful process than a bankruptcy petition however this is not always the case.

For some people the formal nature of a bankruptcy petition along with the direct intervention brought about by the appointment of an Official Receiver or Trustee In Bankruptcy acting without the consultation of the debtor represents a psychological 'line in the sand' that can serve to deliver the resolution that that person may really be seeking at a basic level.

Equally though, many people find that the restrictions that a bankruptcy order can bring about can be much harder than they anticipated and can affect areas of their everyday lives that they had not considered when choosing this path. The ability to make repayments to creditors via an IVA proposal for many people is of moral importance as they believe that they have a moral responsibilty to repay at least some of what they owe to their creditors.

Some of the main advantages of the IVA option are listed below:

* Enables an individual to reach a binding agreement with their creditors over an agreed period of time unlike informal debt management plans that are not binding on creditors and can last for many years.

* Ensures that all interest and other costs are completely frozen throughout the duration of the IVA period. Again this is different to informal debt management plans where interest and charges are often not frozen.

* IVAs for the most part include an element of debt write off by creditors upon completion of the IVA period. Often times the debt write off within an IVA can be 50% or more of the total amount of debt owed to the creditors.

* IVAs are not openly advertised as is the case with bankruptcty. This allows for the individual to enter into an IVA agreement without having to disclose an often sensitive issue openly.

* For Sole Traders or Company Directors the IVA option allows them to continue trading and will not affect a persons directorship status at all.

<a href="http://myvesta.org.uk/programmes/myvesta_iva.html" title="Myvesta IVA Advice">Myvesta IVA Advice</a>