Tuesday 2nd of February 2010
A man who has been living and working in Spain for the past five years has asked whether his growing UK debts should be tackled with bankruptcy, although he may decide that an individual voluntary arrangement (IVA) is more ideal.
The man, known as David, from Seville, wrote to the Independent asking Kevin Boon, of the Consumer Credit Counselling Service, if he should move back to the UK and confront his debts there.
He said he has been offered a position at the Swiss arm of his company but some of his friends have advised him to come back to the UK to meet his financial commitments.
Should he decide to move back, an option other than bankruptcy may be an IVA. David may find an IVA better answers his debt problems if he is worried about the potential consequences bankruptcy can have on his career.
An IVA can merge different debts of more than £15,000 into one, monthly repayment, which can make repayments more controllable as the interest rates are also frozen.
"The advice would depend on how much money you currently have left over after paying your priority costs, such as rent, mortgage payments, utility bills and such like," Mr Boon suggested.
If David has enough money under an IVA to meet such commitments then this could be better than resorting to bankruptcy.
Consequences of bankruptcy may include losing a home and other assets in order for them to be sold to raise cash to clear your debts.
Although David does not state what his profession is, certain ones are barred to those who have been declared bankrupt, including police officers, those in the armed forces, accountants and solicitors.
Individuals cannot be a director of a limited company when bankrupt and so for some people, an IVA could be a better option to clear their unsecured debt if they want to ensure their career is protected.
By Neil Burton
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs could help kerb reckless spending
