Friday 29th of January 2010
Individual voluntary arrangements (IVA) could be a better way for Britons with debts of more than £15,000 to repay what they owe, after a website explains the consequences that going bankrupt can have.
"Non-essential assets" including homes are sold in order to repay borrowers under a bankruptcy, moneysupermarket.com explains, something which an IVA can avoid so long as repayments are kept up.
People who are declared bankrupt may find they have to use a pay-as-you-go mobile phone and prepay for services such as gas and electricity.
"Some people will lose their jobs as a result of bankruptcy, in particular police officers and armed forces personnel. While you are bankrupt, it’s illegal to start a new business," according to the website.
Repaying debt through an IVA can be the answer to keeping it a private matter, unlike bankruptcy, which is often reported in local newspapers.
The News of the World recently reported that bankrupt Kerry Katona has been shopping for clothes rather than paying her mortgage which could soon see her property being repossessed.
Repossession could be something she wants to avoid, especially as she has young children, a concern other Britons in debt may also have.
By Mark Waterman
- 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 halt mounting interest on reward credit cards
