IVA - A Government Introduced Alternative to Bankruptcy
In the third quarter of 2006, 15,416 people were declared bankrupt compared to just over 12,000 over the same period in 2005. The rising number of bankruptcies is a cause of concern and a clear indicator the debt crisis in the UK.
More promising perhaps is the increasing number of people signing IVAs instead of declaring themselves bankrupt. The number of IVAs being signed has more than doubled between 2005 and 2006 and is set to double again in 2007. This shows that the message about IVAs being a good alternative to bankruptcy is getting across.
IVAs were introduced by the government in 1986 as a legitimate alternative to bankruptcy which would allow people in serious debt to come to a formal debt re-payment arrangement with their creditors.
Unlike bankruptcy:
- \r
- There is less stigma associated with an IVA because it is a private arrangement between a debtor and his/her creditors \r
- You may not have to relinquish your assets (including your home). \r
- An IVA does not affect your professional status \r
- You can continue to run a company and act as a Company Director. \r
- You do not have to tell your employer about your IVA \r
- You can still hold public office \r
IVAs are also an excellent way to avoid bankruptcy because they allow people to clear their debts by making affordable monthly repayments. Moreover, it is common for a large percentage of the debt (sometimes as much as 80%) to be written off altogether.\r Another reason why an IVA is a good alternative to bankruptcy is because it benefits creditors as well as debtors. An IVA offers a greater repayment of the debt than would otherwise be achieved if the debtor were made bankrupt.\r IVAs are usually most suitable for people with debts over 20,000 who can afford to pay at least 200 a month into an IVA fund.
Clear Starts National Debt Helpline, prides itself on offering an ethical and professional service that people can rely on. The feedback from happy clients and messages posted across the internet are testament to the service that the organisation provides.
You can speak to a specially trained advisor on any debt matters, and with no obligation, simply by calling their freephone number.
Call Clear Start on 0800 138 5445
\r Visit us at http://www.clearstart.org
\r E mail us at info@clearstart.org
\r For further information about Individual Voluntary Arrangements, please visit IVA Advice Service
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