IVAs in the UK

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Date: Mon, 21 Dec 2009 Time: 3:17 PM
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If you are a resident of the United Kingdom and are experiencing economic problems, there is one option available to you that are not available to citizens of other nations. This option is known as an individual voluntary arrangement or IVA for short. Usually an individual voluntary arrangement is a better alternative to resorting to bankruptcy. It is recommended by financial advisors that consumers determine the feasibility of this option before they even consider declaring bankruptcy.

An IVA is a financial proposal made to one's creditors. The IVA presents a plan for repaying the debt. The consumer proposes to pay off a portion of the debt within five years. After such time, so long as the payments have been made in a timely manner, the consumer is resolved of their debt. This is a more satisfactory arrangement for both consumer and creditor. If the consumer simply declared bankruptcy, they would have significantly impacted their credit. The creditor would not be repaid any of the money owed. An IVA is often a happy medium for both parties involved.

Securing an IVA must be processed through an insolvency practitioner, who has the skills to draw up such a proposal. When in the process of seeking an IVA, consumers are able to obtain interim orders. These interim orders will cease any measures being sought by your creditors. However, if your quest for an IVA fails, the interim order would no longer be in effect.

There are many advantages to obtaining an IVA rather than bankruptcy. With an IVA, you are still in control of your assets. No one is forcing you to sell certain things. An IVA does not severely impact your credit as would a bankruptcy declaration. IVAs are more private whereas bankruptcies are published in the newspapers. If you have declared bankruptcy, you may be prevented from serving in public offices or even obtaining employment. However, if you instead secured an IVA, this would be prevented. The fees involved in a bankruptcy declaration can be quite costly. However, securing an IVA is much cheaper, which helps given the fact you are having financial problems anyway.

About the Author

David Salt writes for debt-free.org.uk and takes great pride in helping people to be debt free