When it comes to financial problems and their solutions, everyone has their own unique set of circumstances, which makes their situation unique, and hence, the solution also being unique instead of being generalised. Hence, one should keep in view that whenever you are thinking about bankruptcy or IVA, it is important to remember that one cannot really choose one over another because each of the solutions is unique to different people.
Questions like the nature of work, income, home ownership, retirement and the amount owed in debt are important in order to decide whether to go for bankruptcy or IVA. Both of these insolvency solutions keep your ability to borrow limited during the time they are in progress. For about six years, both bankruptcy as well as IVA affect your credit rating and make it rather difficult to get credit. There are certain kinds of debts like secured debts or court fines that can be written off neither by bankruptcy nor by IVA.
Besides your situation, there are also some other factors that are different in bankruptcy and IVA and it is important to understand the difference before you make your decision. In bankruptcy, it means that you have lawfully declared your inability to pay your debts and bankruptcy has to be applied for through court.
If one is successful with the process, all the assets are distributed among the creditors. You can get a discharge from the bankruptcy in about a year. However, the record of your declaration of your bankruptcy would stay in your credit records for about six years.
The disadvantage to bankruptcy is that you would have to declare it publicly and you would have to lose not only all your assets, but also your home, if you own one. You do not only lose all your possessions, but your credit rating also gets affected. Your name and address gets published in local papers, hence identifying you in particular and also barring you from entering certain professions.
When it comes to IVA, the greatest advantage that it has over bankruptcy is that you do not have to lose your assets. There is also the fact that an IVA stays confidential between you and the creditors and the agreement is not made public. However, with IVA, there are certain conditions related to income and employment that need to be met.
After you have completed the IVA, your credit rating would be good again as opposed to the fact that bankruptcy affects the credit rating years after you being discharged. With an IVA, you can save your career as well because it does not have any kind of impact on your employment or job, while bankruptcy does because some employers do not hire people who were once involved in a bankruptcy case.
The choice of choosing an IVA or bankruptcy is entirely up to you. However, it is, important to review all the associated factors before making a decision about your choice of insolvency method.
Edward Woodwards is a financial expert. If you are thinking about IVA then you may contact with him today to take iva help.
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