Bankruptcy versus IVA

Bankruptcy

IVA

Loss of assets

Any property such as a house or flat must usually be sold. This is also true of other significant assets, such as your car.

You will not usually need to sell your house and will often be able to retain many other assets.

Level of control

Once a bankruptcy is initiated, the outcome is dependent on information gathered by the Official Receiver and on the decision made by the presiding magistrate on the day of the bankruptcy hearing.

IVA negotiations are handled by someone working on your behalf. The terms of the IVA are subject, within limits, to what makes sense to both you and your creditors.

Credit status

Your credit status will be nonexistent – it will be impossible or very difficult to get a mortgage, or any other credit such as a card or a loan.

When you have successfully completed an IVA you will be able to start building a good credit rating again. Although an IVA is recorded, you will have demonstrated an ability to complete a five-year repayment program.

Stigma

Bankruptcy is advertised in the papers and many people will know about it.

An IVA is a private agreement with your creditors. Nobody else needs to know about an IVA.

Career

Certain employers will not accept someone who is or has been bankrupt and there are certain careers closed to you. There are also restrictions on owning a business or being a director.

An IVA does not have an impact on what career you can pursue or what office you can hold.