Debt Consolidation is not the Only Alternative!
IVA Monthly Payments v
the Bankruptcy Deal
Various advertisements and advice centre pamphlets would suggest considering the IVA monthly payment option as against the more infamous bankruptcy deal. If nothing else, such tag lines / commercials impel at least finding about both the debt elimination methods and accordingly deciding upon the more suitable path. If this happens to the reason behind your investing substantial time towards research, this page could be the perfect answer. Subsequent paragraphs outline the fundamentals of IVA and thus the corresponding IVA monthly payment route to debt management and the nuances of filling bankruptcy. Based upon the outlined overview and personal circumstances, you could decide in favor of the either.
IVA Monthly Payment Plan
IVA or the Individual Voluntary Arrangement is a legal channel, governed by the UK law, to help clear the seemingly unmanageable debt mess. IVA entails a formal discussion between the debtor and creditors to reach upon mutually beneficial payments terms. As a process, IVA requires preparation and presentation of a payment plan by the debtor to the group of creditors. Creditors study the proposal, arrange a creditor’s meet and decide upon the suitability of the proposal. They have the option of accepting or rejecting debtor’s application. If required, creditors could also suggest modifications in the proposal before acceptance. Once finally accepted, the proposal is submitted as a legal document, to be lawfully abided by both the concerned bodies. Typically, the payment plan entails making lower IVA monthly payment to the creditors. An IVA monthly payment plan could stretch up to 5 years and define lower overall payments than otherwise applicable. It is the share of the unsecured creditors, which is usually sacrificed during the negotiations of IVA monthly payment plan.
Bankruptcy Setup
An alternate to the outlined IVA monthly payment plan entails filling for bankruptcy. Both the options are legally abiding and applicable only for those with high debts to pay and therefore considered substitutes. As a procedure, bankruptcy eliminates all debts and allows the debtor to start all over again. Key highlights of the arrangements include liquidation of all assets, to pay the creditors and thus clear pending debt claims.
An Analysis Sheet
As apparent both methods allow debtors to immediately bar any nuisance caused by
unpaid debts. It is the treatment which varies. While in bankruptcy, all assets
are liquidated and the claim settlement course is decided by law, in IVA monthly
payment, the debtor gets to decide the repayment pattern. Another important
distinction relates to the treatment. Though both methods affect credit rating,
bankruptcy is publicly announced, while the IVA monthly payment plan is managed
in private surroundings, with no public information clauses to cater to.
With bankruptcy, employment issues are possible and business terms could be
negatively affected. However with IVA monthly payment plan, the debtor has the
liberty to continue like before, without experiencing negative implications on
job profile.
Both bankruptcy and IVA monthly payment plans are quite important and must not
be treated lightly. Followed by precise assimilation of the stated, a
suitability check with personal circumstances is therefore essential.
Articles on IVAs
What is an IVA?
The IVA Process
How to Start an IVA
Advantages &
Disadvantages IVA Payments