Bankruptcy IVA Comparisons

Comparison between UK Bankruptcy laws and an (IVA) Individual Voluntary Arrangement.

UK Bankruptcy

• Bankruptcy is always publicly advertised. Public notification will normally appear in your local newspaper containing details of your name, address and occupation.
• All assets will vest in your Trustee (the person appoined by the court to oversee the bankrupcy) and may be sold to repay your debts.
• You may still have to make monthly contributions for up to 3 years at the discretion of the Official Receiver or Trustee in Bankruptcy.
• If you fall into financial difficulties again, and are made bankrupt by creditors, you will have to serve a minimum 5 years bankruptcy.
• You will interviewed by an Official Receiver and questioned as to how or why you fell into difficulties and if you behaviour was considered to be rash or hazardous you may be subject to a Bankruptcy Restriction Order.
• You have a duty to co-operate with the Official Receiver or Trustee in Bankruptcy. You cannot take on credit in excess of £500 without declaring that you are a bankrupt.
• DTI will keep a record of the bankruptcy for up to 15 years.

Individual Voluntary Arrangement.

• An IVA is not advertised.
• All assets can be retained.
• In control of own finances.
• In control of own income.
• A large proportion of the debt may be written off. Interest is frozen.
• Replace balance of debt by you will only pay what you can afford.
• All contact from creditors should stop completely.
• Can continue running own business.
• Can continue as a director.
• Will not affect your employment status.
• No court proceedings can be brought against you in respect of any of the debts bound by the Individual Voluntary Arrangement.
• No question of rash or hazardous behaviour.
• Under certain circumstances an IVA can result in an existing bankruptcy being annulled.
• Landlords are not notified, unless they are a creditor.