The Debt Clinic

Let's Make Your Finances Better

Free Call Back - Please Fill In Your Details

Fill in your details and one of our trusted partners will call.

Of course, there's no obligation.

First Name:
Surname:
Address:
Post Code:
Phone Number:
Mobile Number:

Total Debts (Unsecured - ie: not including mortgage)

How many different companies do you owe money to?

(not including mortgage)
Are you or your partner in fulltime employment?Yes No
What is your total monthly household income?

When is the best time to call?
Date of Birth:

Don't Enter Anything In This Space!

E-mail Address:

An advisor will call you for a FREE consultation,
by clicking submit you are accepting our
privacy policy

Easy Product Advisor

Which solution is right for you?
Our test will give you an unbiased look at which service can help you

Start Test

IVA Vs. Bankruptcy

Pros and Cons of an IVA

With an IVA you can have up to 75% of your debt written off, and there will be no more interest or charges added. You agree to pay what you can afford in a single monthly payment.

After the duration of the IVA, which is usually 5 years, you will be debt free, and your creditors bound by the IVA's terms and cannot recoup any further money from you.

Unlike bankruptcy, in an IVA agreement, you will rarely have to sell your home and other major assets such as a car.

There’s far less stigma with an IVA agreement compared with bankruptcy. There’s no requirement to advertise in the newspapers, or notify your landlord or employers.

An IVA won’t threaten your career if you are working in the armed forces or practising in other professions, where becoming bankrupt means that you could lose your licence or your job.

You can still become a company director if you have an IVA.

With an IVA you can still run a current account and stand a better chance of obtaining credit when the duration of the IVA is over.

The disadvantage of an IVA is that you usually make payments for 5 years which is longer than bankruptcy where your payment arrangement lasts for 3 years.

Pros and Cons of Bankruptcy

The period of bankruptcy is much shorter than for an IVA.

The disadvantage of bankruptcy is that you lose control of all your assets, and you will very likely lose your home.
One further disadvantage of bankruptcy is that it is more expensive to set up than an IVA.

Conclusions

If you become insolvent, whether or not you decide to apply for an IVA or bankruptcy, it has important implications for your long-term financial status, and possibly your job.
There are differences in how your assets are handled, particularly your home, as well as in the time period before you are either discharged as a bankrupt or have completed your IVA.

There are advantages and disadvantages to both depending on your circumstances, but no one should decide which is the best option without first seeking professional debt management advice.