Advantages of Bankruptcy or IVA
If you are struggling with debt and are going through the process of considering your debt solutions, you may be confused about what your options are and how to understand the advantages of bankruptcy or IVA.
Both bankruptcy and IVA are debt solutions designed for those who are severely struggling to repay their debts, but both bankruptcy and IVA offer distinct advantages from each other. The right solution for you is dependant on a number of different personal circumstances.
The best way to understand the advantages of bankruptcy or IVA is to get personalised Bankruptcy or IVA debt advice as this will give you a deeper insight about how each of these debt solutions could offer advantages to you.
Bankruptcy Advantages Over IVA
Debt Free in a Shorter Period. Most people who enter into bankruptcy will be discharged after one year, although it is worth knowing that you may still have to make contributions to your bankruptcy for a total of three years and if a Bankruptcy Restriction Order (BRO) is issued you may be subject to bankruptcy restrictions for up to fifteen years. This debt free period is in contrast to that of an IVA which has a typical term of 60 months.
IVA Advantages Over Bankruptcy
Keep your home. Many homeowners opt for choosing an IVA over bankruptcy because it is unlikely that you will have to lose your home as part of the arrangement. Although you should be aware that you may have to release some of the equity in your home at some point during the IVA term.
Less Social Stigma. Bankruptcy is often dismissed as a debt solution by many as it is too much of a highly public process where your details will be published. IVA has the advantage over bankruptcy by not being advertised anywhere, although both debt solutions are viewable on the Insolvency Register.
Both Bankruptcy or IVA will stay on your credit file for six years, and those who have been made bankrupt may have to admit this on certain application forms.