Friday 15th of January 2010
Bankruptcy was the most common form of insolvency in the recessions of the eighties and early nineties, although individual voluntary arrangements (IVA) have seen their popularity soar during this economic downturn, a new report says.
IVAs can be a better option for some Britons than bankruptcy as although IVAs do have some negative consequences, people are "very unlikely" to lose their home, Channel 4’s FactCheck states.
People who are in serious debt and whose biggest fear is losing their home may therefore want some more answers on IVAs to see if repaying their unsecured debt this way is an option, rather than having to resort to bankruptcy.
IVA questions borrowers may ask is how this type of repayment plan works. An IVA can merge unsecured debt over £15,000 into one, monthly repayment.
Furthermore, interest is frozen, which could be a relief to those people who find staying on top of climbing interest a serious struggle.
The report notes: "[Bankruptcy] is the harshest and best-known form of insolvency; someone deep in debt can either go to court to declare themselves bankrupt voluntarily, or be forced into it by the people money is owed to."
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
- IVA advice might focus on credit card debt
