Monday 14th of December 2009
An individual voluntary arrangement (IVA) has been entered into by a businessman in order to avoid bankruptcy, it has been reported, an option that many Britons with their own firm may prefer when in significant debt.
John Steven, from Plymouth, who has a number of business interests in hotels, pubs and restaurants, has found that an IVA answers his concerns about being declared bankrupt.
It also helps to reassure creditors that he is repaying a large amount of what he owes, the Plymouth Herald reports.
Mr Steven owes debt to a variety of lenders but under an IVA, all unsecured balances can be merged together at a frozen rate of interest so that repayments are more manageable and likely to be met.
He may also find bankruptcy to be a less favourable plan of action than an IVA, as the former option could end up in him losing his home and ability to hold a director-level position.
"Mr Steven, who is in Portugal, said the IVA related to debts backed by personal guarantee and was part of a wider restructuring of his financial and business arrangements," the publication noted.
By Kim Parsons
- 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
- Creditors may be appeased by IVA support
