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The credit crunch brought a significant rise in the number of personal insolvencies in the United Kingdom. Many citizens have had to file for bankruptcy and some have decided that an IVA is a better choice for them. If you are facing insolvency, it is good to be aware of the options that are available to you so that you make the best decision you can.

The first thing you should do if you’re thinking about an IVA is weigh out the pros and cons of this particular debt solution. Is it a good fit? Will this help in the long run? These are questions you should be asking. If you have significant debt than you might not have as many options so try to deal with the problem before it gets too bad. You also don’t want to jump into a solution that isn’t a good fit for you.

There are many different advantages and disadvantages to each debt solution. The first of the pros for an IVA is that your information is not shared with anyone so it’s a relatively discreet matter. Another great part about them is that you will be 100% free of debt at the end of the term.

With a bankruptcy you could lose your home so a lot of people think IVAs are better in that regard. If you pay the monthly premiums of your IVA then your home will stay safe and so will you. Another advantage is that you can keep a bank account and withdraw money as normal. You’ll likely not be able to take out any loans but it’s probably best that you didn’t anyway.

Five years is how long it will take you to pay off your IVA but the great part is that you may be able to write off up to 75% of your original debt. That’s a lot of extra money that you won’t need to pay back. An IVA does bind you into a contract but that doesn’t mean your creditors can contact you. This means that you wont be getting any more annoying phone calls from the credit card companies or collection agencies they work with.

The actual IVA document is a legally binding agreement so that means that your creditors can not take any action against you. They cannot make any demands. Business owners and directors of companies can continue to trade, which is very important to them. Without it many business professionals would likely not have been able to keep their employment.

There are some disadvantages to IVAs as well. Some companies that offer IVAs sell them as being perfect but that is not the case. First of all, an IVA will take 5 years to complete in most cases. A bankruptcy is only a year. IVAs are also registered with a insolvency list which could potentially be made available to the general public.

An IVA is closely monitored by an insolvency practitioner and one of the things they do is review your wage slips and salary updates. You cannot pay less than you earn into your IVA so this makes things difficult but an IVA is great for many other reasons.

Want to find out more about anIVA, then visit Gary Price’s site on how tofind a insolvency practitioner.