IVA: Indispensably Valuable Alternative! No comments yet

The best advice that can be given to anybody in trouble with debt is to consider ‘debt management’, ideally with a recognised body such as the Consumer Credit Counselling Service (CCCS) rather than small company which may advertise on TV and is usually only interested in profiteering. This comment however, will discuss the comparison between the two options above.

IVA or bankruptcy? An IVA is a great alternative to bankruptcy, not just for the indebted individual involved, but also or the majority of creditors, who in general receive more than they would from bankruptcy proceedings.

Think hard about the implications of bankruptcy. Besides the stigma that is avoided by not having a bankruptcy order on your credit file for the next six years, making it nigh on impossible to obtain a bank account, there is also an element of privacy to an IVA that is not otherwise afforded. An IVA is not advertised in the local paper, leaving no threat from an observant mother-in-law or line manager.

Although a debtor’s credit file will likely be about the same in terms of a rating, obtaining credit isn’t legally off limits as it is during a bankruptcy, and there are even mortgage lenders who will lend to applicants with satisfactorily conducted IVAs from day one.

The main advantage however, the one which allows consumers to avoid a lot of heartache, is the law with regards to the debtor’s property. Whereas in bankruptcy all assets are turned over to the trustee, an IVA allows you to settle debts without the threat of a forced house sale, meaning there is no need to move and release any equity in one’s property.

As mentioned with debt management, getting debt help by speaking to a professional is the most important first step, and avoiding companies that may make matters worse is paramount. Along with cutting up the credit cards!