Advantages of IVA

The main advantages of Individual Voluntary Arrangement (IVA) in settling the claims of creditors are as follows:-

Stigma
An IVA is a private pact between a debtor and a creditor. From 6th April, 2006, onwards, Bankruptcy is no longer considered to be an apt matter to be advertised in the newspapers. Such advertisements are printed only in London Gazette, English daily. The debtors as well the bankrupts are listed publicly on the Personal Insolvency Register and will be recorded by credit reference agencies.

Length
An income based IVA can often last up to 5 years, although the length can vary over time. A bankrupt is normally automatically discharged after just 1 year or less if the bankrupt is eligible for the same. An Income Payments Agreement or Order in bankruptcy (if one is applied, depending on the individuals disposable income)will last for a maximum period of just three years and payments here are generally a lot lesser than what it is under an income based IVA.

Credit
Unlike Bankruptcy, an IVA does not statutorily prohibit a debtor from seeking credit facility, although the proposal may do the same. After a bankrupt has been discharged no legal action can be taken to stop the discharged bankrupt from getting credit facility.

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