Have you looked at a IVA instead of going bankrupt?
Bankruptcy versus an IVA
This section of the site will discuss the main difference between a bankruptcy and an individual voluntary arrangement (IVA)
The debt support team at The UK Insolvency Helpline will discuss the debt management plan procedure, the IVA and bankruptcy to see what methods is best suited to your case.
There are many differences between IVA vs Bankruptcy, the main ones are:
■That assets are handled differently
■The home is treated differently.
■The time periods for each procedure are different.
■Employment status has to be considered before choosing each procedure
There are many implications to be considered with an insolvency procedure such an IVA or Bankruptcy and that is why many clients often decide to take out a debt management plan, debt consolidation loan or a remortgage for their situation.
If you are facing debt problems we can help you decide whether an IVA or bankruptcy is the best option.
Bankruptcy vs an IVA – The advantages of an IVA over bankruptcy.
■An IVA can write up to 75% of debt off
■In an IVA it is easier to get a mortgage, whereas in bankruptcy it is very not possible until discharge.
■An IVA will stop all interest on the debt.
■The IVA will leave the client debt free after 5 years maximum.
■After an IVA is completed the debts are clear.
■In a IVA you can keep your property, unlike bankruptcy where if you have equity you will need to sell it.
■In an IVA you get to keep control of your assets, whereas in bankruptcy they come under scrutiny.
■An IVA is better for your career progression whereas bankruptcy may cause problems in certain industry sectors.
■If you can do an IVA you can still be a director of a limited company, whereas in bankruptcy may you cannot.
■An IVA has less social stigma than bankruptcy.
■An IVA is easier on you credit rating than bankruptcy.
■In an IVA it is easier to get a bank current account, whereas in bankruptcy it is very difficult.
■Bankruptcy involves lengthy court procedures, whereas an IVA avoids court action
■Bankruptcy is more expensive to set up than an IVA.
Bankruptcy vs an IVA – The advantages of a bankruptcy over an IVA.
■A bankruptcy will last for 1 year whereas an IVA can last up to 5 years.
■A bankruptcy will write off all debts where as an IVA can only write of up to 75% of debt.
■Bankruptcy is better for clients with no assets. Where as an IVA may look for some of the equity in the assets.
■An IVA is not suitable for the unemployed, whereas bankruptcy can be considered for those not working.
■An IVA is not suitable for those on income benefits, whereas bankruptcy can be considered for those on benefits.
■Bankruptcy is better for clients with no assets. Where as an IVA may look for some of the equity in the assets.
■Bankruptcy is better for clients not concerned about the social stigma. Where as an IVA is better to reduce the social stigma.
Bankruptcy vs an IVA - The final decision is yours
For clients who are seriously in debt an IVA or bankruptcy may be the only option. Client must therefore understand the full implications of either procedure. The free debt advice offered by The UK Insolvency Helpline will help you decide whether an IVA or bankruptcy is the right route to take.
An IVA or bankruptcy will only have been discussed as an option if the Insolvency Practitioner feels that it is a suitable option for you to consider, based on the surplus income you have left once all your essential household costs have been accounted for. An IVA or bankruptcy are designed to give you peace of mind, safe that you will be debt free soon and able to make a fresh start. Do not let other debt companies undermine you by suggesting they have a better option.
http://www.insolvencyhelpline.co.uk/iva-guide/iva-vs-bankruptcy.php
http://www.ivazone.com/IVA/IVA-vs-bankruptcy.html
Andy