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| Individual Voluntary Arrangement (IVA) Vs Bankruptcy |
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| If you can resolve your debt problems with options such as, Money Management, Consolidation Loan or Debt Management Plans then there are only 2 other Debt Solutions. |
Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors to repay you debt at a rate you can aafford. Your IVA will be put together and monitored by an Insolvency Practitioner (IP),
The term of an Individual Voluntary arrangement (IVA) is set (Normally 5 Years) and at the end of the IVA any debt that has not been replayed will be written off leaving you debt free..If you own a property and the property has adequate equity, you may be asked to release this equity into the IVA |
Pros
- Your creditors write off some of the debt (normally 75%)
- Interest and charges are frozen, by law
- You don't face the stigma of becoming bankrupt, and you can keep your job if you're in a profession where you're not allowed to be bankrupt.
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Cons
- After a year, you may have to remortgage in order to keep your house and pay off some of your debts.
- You can't get significant unsecured credit.
- Your credit rating is affected for six years, which means new mortgages will cost more and you might have to put down a larger deposit.
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Bankruptcy
Bankruptcy is often a better option than an Individual Voluntary Arrangement (VA), although I know that a few people may disagree. If you own a property and have a large amount of debt, with little or no equity then your property will more than likely be safe. |
Pros
- Most of your debts are cleared.
- Your are discharge normally in 12 months.
- You keep assets such as TVs, DVD Players, Etc
- Payments to the court will last a maximum of 3 years but normally last 12 months.
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Cons
- You will probably lose your home, if you have equity.
- You lose a lot of your assets, including cars worth more than £1,500.
- Your name is published in the local papers and the London Gazette.
- Your credit rating is badly damaged for six years
- You cannot be a director of a company or work in certain professions.
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| Call Your Debts Cleared free on 0800 692 2000 or Take our online DEBT TEST |
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