Pros And Cons For Each Alternative
To make an informed choice between an IVA and bankruptcy, you must understand the advantages and disadvantages of each option. The advantages of the voluntary agreement are summarized as follows:
When your agreement expires, you will once again be debt-free.
The transaction is entirely confidential, so no one needs to know about it. Consequently, you lack the social stigma associated with bankruptcy.
Up to 75% of your debt can be written off, and your creditors cannot pursue you for this amount.
You only have to repay what you can afford, so your monthly payment will be based on your actual financial situation.
Once registered, your creditors are prohibited from contacting you about your outstanding debts.
You are significantly less likely to lose your home if you declare bankruptcy.
If you are self-employed, it should not impair your profession, and you should be able to continue working.
What are the possible drawbacks?
In contrast to insolvency, an IVA can last up to five years.
At least £15 000 in unsecured debt owed to at least three creditors is required.
You must be able to afford regular monthly payments, which means you must have a reasonable amount left over each month after paying your essential domestic expenses.
Your credit report will contain a notation for six years.
Your agreement can still fail if you fail to make payments, and you could be declared insolvent as a result.
Now that you are aware of the advantages and disadvantages of an individual voluntary arrangement, we will examine the consequences of filing for bankruptcy. There are not many evident advantages to this drastic action, but there are a few that will help you see the big picture.
After declaring bankruptcy, the entire process takes only one year to conclude.
You will be liberated of significant debt and able to start over.
Among the disadvantages of declaring bankruptcy are:
It must be advertised in the newspapers for all to see; therefore, you cannot keep it a secret.
If you own a business, it will be promptly shut down, and all of your employees will be let go.
You will effectively lose control of all of your assets, including your home, life insurance, and even your retirement savings.
You will lose any assets you acquire during the procedure, including insurance payouts, inheritances, and home appreciation.
The closure of all bank accounts and credit cards.
You will forfeit your professional and business standing.
The fact that you have declared bankruptcy will remain on your credit report for six years.
This should help you choose between these two alternatives. The voluntary arrangement is the wiser choice because it facilitates getting your life back on track. Whether you choose an IVA or bankruptcy, your credit will be impacted.""
" - https://www.affordablecebu.com/