IVA Vs Bankruptcy ? What You Need To Know | Trade Finance Bank

IVA vs Bankruptcy is a hot topic of discussion among individuals who are neck deep in debt. They are unable to choose any one program out of these two as they measure their options. Quite importantly, each one of these programs has its own advantages as well as disadvantages which must be known before proceeding. Here is some information about IVA vs Bankruptcy which you need to know.

As and when you will be declared bankrupt, your assets will be sold to make payment for dues that you accumulated over the years. An important point to note is that only unsecured debts would be paid in this way. The sale process will be supervised by a court appointed trustee or an official.

All assets, including property, time share, automobiles, stocks and other investments, are sold in the process. Bankrupt individuals are forced to move out of their house if it gets sold. The official appointed by court handles sale process if the original owners are not able to sell their property.

Insolvency has serious consequences on credit history and profession of the insolvents. They lose all types of savings but are allowed to keep their pension. They are not allowed to continue in business, if any, but can continue remaining employed. However if they handle monetary transactions, their employer needs to take a call regarding their employment.

Besides other things, insolvency wrecks the credit report as well. It remains on credit report of bankrupt individual for a certain period of time. Exact period of the same depends on particular chapter of bankruptcy which is being filed. It is beneficial to have a look at different chapters and their features.

IVA, or Individual Voluntary Arrangement is an alternative to getting bankrupt. It involves an agreement between a lender and a debtor in which debt is restructured. Current income and monthly expenses are given due consideration while deciding time and repayments under this program.

Individuals availing this program need not to sell their homes and other assets. Though they will need to release equity by re-mortgaging their property, they will remain its owners. In addition, they can keep all of their assets but will need to do away with luxurious ones or keep modest ones, if necessary.

But the creditors need to be convinced for this program beforehand. Obtaining their consent is absolutely necessary for going forward with the program. This program becomes binding on all stakeholders once it has been approved by a majority of them (three-fourth in most cases).

In most cases, IVA lasts for a period of five years. It covers overdrafts, personal loans, catalogues and credit cards etc. But it does not cover payments towards maintenance orders, fines and secured debts, if any.

Doing all the paperwork on your own might not be easy, especially if you do not know fine prints of IVA vs Bankruptcy debate. In such a scenario, consider taking help of a professional. Whichever program you choose, there is lot of wrangling to be done with lenders which ought to be left to an experienced professional.

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Source: http://www.tradefinancebank.com/iva-vs-bankruptcy-what-you-need-to-know/

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