Individual Voluntary Arrangements- A New Alternative to Bankruptcy

This May, the Department of Trade and Industry in the United Kingdom establish that there were 10,091 bankruptcies in the first one-fourth of 2005. This stands for an addition of 24.5% on the corresponding one-fourth of last year.

Bankruptcy can go forth an individual feeling ashamed, down and out of control. Furthermore, for many the stigma of bankruptcy can be too much to bear.

However, there may be an option to going bankrupt which can also assist people in serious debt to do a fresh start.

The Insolvency Act of 1986 introduced The Individual Voluntary Arrangement (also known as an IVA) as an option to bankruptcy.

The thought behind the introduction of the Individual Voluntary Arrangement was to enable people facing financial troubles to come up to a formal understanding with their creditors rather than having to confront bankruptcy. If an marsh elder is agreed between the debtor and creditor:

Interest on the loan is frozen
Legal legal proceeding are stopped
The overall debt is reduced

An Individual Voluntary Arrangement is generally seen as a more than advantageous option than bankruptcy from both the debtor’s and creditor’s perspective. This is because there are no fees or legal legal proceeding involved with an IVA, unlike with bankruptcy. Furthermore, from the creditor’s point of view, an Individual Voluntary Arrangement offers a greater repayment of the debt than would otherwise be achieved if the debtor were made bankrupt.

IVAs stand for an exciting new chance to those facing serious debt to both avoid bankruptcy and to do a fresh start.