For insolvent debtors, IVA and Bankruptcy may be the only options. Being Insolvent means that you cannot afford to repay your debts each month. Do not be fooled by repaying minimum monthly payments and thinking you can afford your debts, because with the interest and charges applied by your creditors you could be paying for up to 40 years.
Bankruptcy should only ever be considered as a debt solution in the very last resort, after all other debt solutions have been exhausted.
See the comparison table below for a simple guide to the main differences between IVAs and Bankruptcy:
| IVA | Bankruptcy | |
|---|---|---|
| Are my details kept private? | Yes, an IVA is not advertised. Although details can be found on a government website. | No, all bankruptcy orders are advertised in your local newspaper |
| Will my situation remain private? | Yes, only creditors are notified. | No, everyone that you are financially connected with will be contacted |
| Can I still run a business? | Yes, you can still be a company director or in professional roles involving finance | No, normally any business will be closed immediately. |
| Will I keep control over my assets? | Yes, some assets can be excluded from your proposal. | No, assets can be sold to raise money for your creditors, this includes your house. Any assets acquired during the bankruptcy term are also lost. |
| Can I keep my bank account? | Yes, although some extra facilities may be removed. | No, bank accounts, credit cards will be closed and any hire purchases cancelled. |
| Can I avoid appearing in court? | Yes, as long as you are available to answer questions on the phone during the creditors meeting. | No, you will have to go to court. |
| Am I legally protected from my creditors? | Yes, court proceedings cannot be brought against you one debts are bound by the IVA. | No, your creditors may look to sell your assets and take any action they deem necessary against you. |