Bankrupt? IVA is the Perfect Solution
Being declared bankrupt is not a good thing for a debtor who has plans to invest in the future. Bankruptcy denies you the opportunity for future borrowing by permanently posting a record of you as being an unworthy credit person. An Individual Voluntary Arrangement for debt repayment is a far better alternative to bankruptcy. This is how it works:
Under an IVA, the individual debtor will arrange with the creditor to have a percentage of the debt owed reduced. This can be reduced to say by 60% and upon repayment, the debtor is free. The maximum period allowed in this arrangement is 5 years.
The difference between an IVA and bankruptcy is that in the latter, the debtor publicly declares his or her inability to repay a debt and is therefore not expected to pay any of the unpaid debt. With an IVA, the borrower pays a percentage of the remaining debt.
An IVA is definitely the best alternative for a borrower with a ballooning debt. You will also be protected from repaying large amounts of the interests charged.
You may need a professional counsellor for advice and to help you decide whether to apply for bankruptcy or an IVA. He or she will also help you develop an appropriate plan.
The IVA debt management plan is good because it will not be made public unlike a bankruptcy declaration thus has no stigma attached to it. You also get to reduce the debt you owe by up to 75% or renegotiate for favourable monthly repayments, giving you complete debt freedom after 5 years.