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Bankruptcy vs IVAs -
When a person is in debt they often feel that there is nowhere to turn, many hear
on the grapevine about IVAs and Debt Management Plans and even bankruptcy, but they
do not understand which option is best for them.
At Debt Release Direct, our job
is to assess each individual and their circumstances in order to recommend the best
debt management solution for them.
The main differences between an IVA and bankruptcy
are that the assets are handled in a different way and the home is treated differently,
the time periods are different and the employment status has to be considered before
choosing each procedure.
An IVA or individual voluntary arrangement is advantageous
because it is easier to get a mortgage than with bankruptcy, you can keep control
of your assets and you can still be a director of a limited company. With an IVA
it is easier to get a bank account and the IVA will leave the customer debt free
after a maximum of 5 years, The IVA can write off up to 75% of debt and the IVA can
stop the interest on the debt.
With bankruptcy, it will write of 100% and will only
last for 1 year however it involves lengthy court procedures and it can be difficult
to get a mortgage or bank account. An IVA may take equity from assets, whereas a
bankruptcy will not do this, meaning your assets are safer plus an IVA is unsuitable
for people who are unemployed or on benefits, whereas bankruptcy is applicable to
people of all circumstance.
Bankruptcy or IVA