IVA

It is never an easy decision to make. If you are overwhelmed with debt, you may be faced with an important decision. Do I file IVA bankruptcy or just bankruptcy? The answer may lie with your unique circumstances.

An IVA bankruptcy, or Individual Voluntary Arrangement, is a plan to avoid bankruptcy. The IVA bankruptcy allows you to repay a portion of your debts over time at a rate you can afford, and have the up to 75% of the remaining debt removed. Usually an IVA bankruptcy lasts about five years, during which time you repay your loans. You will not be allowed to apply for new credit during this time. If you have property assets, you may keep them under an IVA plan. An IVA is an agreement made between the debtor and creditor, however most creditors are open to these arrangements because their rate of return is much better than if the debtor declares bankruptcy. If you have property assets, such as a home, and the majority of your debt is unsecured credit such as credit cards, an IVA as a better solution to your debt problem.

Bankruptcy is a debt solution that absolves you of all your debt. Bankruptcy will last only one year, however you will need to give up any property assets, as they will be used to pay off your creditors. Your credit will be negatively affected during this time, and you may not even be able to open a bank account. It is important to research if a bankruptcy will affect your current or future employment prospects. Bankruptcy is considered a last resort for debt problems, but may be the only solution in certain situations.

Both IVA bankruptcy and bankruptcy will affect your credit rating for about six years. It believed that IVA bankruptcy will not affect your credit rating as much as a bankruptcy since it shows the desire to pay your debts. However, both these debt solutions will have about the same negative impact on your credit rating.

Whether you choose an IVA bankruptcy or bankruptcy as a solution to your debt problems, there is a solution that will work for your situation. Debt resolution can help reduce the stress in your life and give you a fresh start to rebuild your finances and your life.