IVA vs. Bankruptcy

  
If you are insolvent, meaning you can no longer afford to repay your debt, an IVA or Bankruptcy are debt solutions available to you.

Please remember that Bankruptcy should only ever be considered as a last resort, once all other options have been fully exhausted. For more information on how to avoid Bankruptcy, contact the All Clear Finance team on 0808 131 0038.

 

IVA vs Bankruptcy - The Main Comparisons: 

 

	IVA	Bankruptcy
Is my name kept private?	Yes, IVAs are never advertised.	No, bankruptcy orders are always advertised in your local paper.
Will my IVA  be kept private?	Yes, only creditors are notified.	No, everyone that you are financially connected with will be contacted.
Can I still run my business?	Yes, you can still be a company director or practice professional roles involving finance.	No, normally your business will be closed immediately. Certain employment situations are also hindered.
Can I keep control over my assets?	Yes, some assets are excluded from your proposal.	No, any assets will be sold to raise money for your creditors, this includes your home.
Can I keep my bank account?	Yes, although some extra facilities may be removed.	No, all bank accounts will be closed immediately.
Can I avoid going to court?	Yes, as long as you can answer questions on the phone during the creditors meeting.	No, you will always have to go to court.
Am I legally protected from my creditors?	Yes, legal proceedings cannot be brought against you once the IVA has been accepted.	No, your creditors may look to sell your assets and take any appropriate court action.

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)