Is an IVA a Good Bankruptcy Alternative?

Deciding upon the right debt solution is never easy, and you may ask yourself if an IVA is a good bankruptcy alternative or whether you should think about any alternative debt solutions. Even if your debt is unmanageable, bankruptcy does not need to be the answer as there are many long term consequences which cannot be avoided.

Before deciding upon any debt solution you should seek expert advice. One Advice have an expert team who can help guide you to the right situation based on your own set of unique circumstances. This could be an IVA, Debt Management Plan, Bankruptcy or another debt solution. The right debt solution cannot be determined until you have spoken to the experts, so call us now.

Is an IVA right for me?

Individual Voluntary Arrangement is short for IVA and is a legally binding agreement with your unsecured creditors. It was introduced as a viable bankruptcy alternative where you agree to repay a percentage of your unsecured debts, and write off any remaining amount which hasn’t been paid on completion of your IVA.

As part of the IVA you must commit to making regular monthly payments towards your debts, over a typical 60 month period. Once you have successfully completed the IVA, any remaining unsecured debt will be written off meaning that you are debt free.

It is important to note that not everyone qualifies for an IVA and the best way to discover if you do is to get expert IVA advice. As a guideline you will need to have unsecured debt over £12,000 which you owe to three or more creditors with a reasonable disposable income. However, it is down to your creditors to decide whether or not to accept your IVA proposal and 75% (in terms of debt value) must agree to the IVA proposal before it can go ahead.

Is an IVA a Good Alternative to Bankruptcy?

The right debt solution for you will be dependant on a number of different factors. And the best way you can discover  if an IVA is a good alternative to bankruptcy for you personally is to get IVA advice. Typically IVAs are often considered a preferable  bankruptcy alternative, but this is not the case for everyone as you may find that you are not eligible for an IVA (although if this is the case there are other debt solution avenues which you may wish to explore, such as a debt management plan).

IVAs do have a number of advantages over bankruptcy, one of the major ones being is that an IVA is unlikely to lead to the repossession of your assets (including your home or car), as long as you stick to the terms of your IVA. It is worth noting that, with an IVA, you may still be required to release some of the equity in your home in the final year of the IVA.

For personalised debt advice and to discover is an IVA is the right bankruptcy alternative for you,call one of our IVA or Bankruptcy specialists.