Reasons to opt for Individual Voluntary Arrangement
The Individual Voluntary Arrangement (IVA) is a formal way of debt solution to pay back debts over a period of time. Being a formal solution means that it is approved by the court and the creditors have to stick to it. It is different from bankruptcy. An IVA debt calculator is available on http://www.ivadebtcalculator.co.uk/ which you can use to calculate how much you’ll have to pay if you select this option.
There are a number of factors which can be considered while making a comparison between IVA and bankruptcy. They are:
- There is a stigma attached with bankruptcy. Though it is no more published in the local papers but they still leave a certain impression on the mind of the person who comes to know about it. An IVA on the other hand is a private arrangement between the debtor and the creditor.
- A bankrupt gets discharged automatically after the lapse of 1 year time period in most of the cases whereas an IVA can often be stretched up to 5 years or longer based on the circumstances and the agreement. So from the time period aspect an IVA has a disadvantage to bankruptcy.
- Unlike bankruptcy, an IVA in most cases does not restrict a debtor from taking any future credit, under certain conditions. Whereas in bankruptcy the debtor can legally obtain a certain amount of credit without revealing one’s status to be a bankrupt. Though, after being discharged, a bankrupt cannot be stopped from gaining credit later. Not just credit, bankruptcy leads to many hurdles for carrying any trade or profession thereafter. On the other hand, IVA carries no such consequences with it.
- There are two kinds of separate fees paid which are included in the arrangement made in IVA. First is the nominee’s fee which is charged for the work done till the agreement is made. The second is the supervisor’s fee which is for the work carried out during the IVA.
- The principal advantage that IVA has over bankruptcy that can change anyone’s mind is the interest that the debtor retains over his home. In bankruptcy the trustee may ask the debtor to sell his house and the debtor has to comply with it but an IVA agreement may exempt property all together or find other ways and means to keep the debtor’s interest in this property safe.
These are some of the most important facts on which the debtor can decide whether to opt for IVA or bankruptcy. To collect more information on IVA, IVAPros provides some more facts on IVA which can be gone through. Debt management is not an easy task but if the help of an insolvency practitioner is taken via IVA then it can be converted into a manageable thing.