BANKRUPTCY OR IVA
Debt is unavoidable in the world of today. It enables you to experience the comforts and luxuries beyond your means. It is the dream of everyone to own a house and a car, and send their kids to school. These dreams are, most of the time, made true by incurring more debt.
On the other hand, what if you are unable to pay back the debt? What are your options? The only solutions are personal bankruptcy or Individual voluntary arrangement. Personal bankruptcy is a process that enables an individual to declare bankruptcy himself, but it is only possible in certain jurisdictions. However, Individual Voluntary Arrangement (IVA) is an alternative for individuals trying to avoid bankruptcy. IVA is a contractual agreement between an individual and a creditor, and is adjustable according to the circumstances of the individual, based on his income, capital, and third party payments.
To choose between the two, one has to consider their difference. In personal bankruptcy, significant assets such as the car or the house are usually sold. However, in IVA, the need to sell assets can be avoided.
Once an individual chooses personal bankruptcy, his credit status becomes nonexistent. As a result, it becomes nearly impossible for him to get a mortgage or a loan. However, once the time period of the IVA is completed, the individual can start to work on building a good credit status again with a very few hurdles.
In personal bankruptcy, one does not have any control over the situation once the bankruptcy is initiated. The outcome is completely dependent on the information gathered by the Official Receiver, and the decision is in the hands of the presiding magistrate on the day of the hearing. In case of IVA, however, a person working on your behalf handles the negotiations. Terms are completely dependent on the individual and his creditor.
Bankruptcy is a stigma that stays attached to an individual, as it is advertised in the papers, and several people find out about the individual going bankrupt. On the other hand, nobody knows if someone is opting for an IVA, as it is a personal agreement between an individual and the creditor. Career is greatly affected by personal bankruptcy, because many employers do not hire people who have been through personal bankruptcy. It also affects other career options, as it does not allow an individual to open his own business or become a director. However, since IVA is a personal agreement, it does not affect the career of a person.