If you are insolvent then you may have few Debt Solution options. Insolvency means that you have a negative net worth and you cannot afford to repay your debts. IVAs and Bankruptcy may be some of the only options you have.
Bankruptcy should only ever be considered as a last resort, ie, after all other debt solutions have been exhausted. The government introduced legislation so that people can avoid having to declare themselves bankrupt. The government wants everyone to receive information that will help them make the best decision.
Below is just a short summary of the main differences, please call our advisors for more information on 0800 048 1768. Use our obligation-free debt wizard to see whether we can give you IVA help.
Are my details kept private?
IVA: Only your creditors will be notified of your IVA. Information about you will be posted to a government website.
Bankruptcy: No, all bankruptcy orders are advertised in your local newspaper. Everyone with whom you are financially connected will be contacted.
Can I keep my business?
IVA: People who are a company director or in professional roles involving finance do not have to give up their businesses.
Bankruptcy: No, normally any business will be closed immediately.
Can I keep control of my assets?
IVA: Yes, some assets can be excluded from your proposal but you may have to release some equity from your property.
Bankruptcy: No, you may have to sell assets to raise money for your creditors. This includes your house. Any assets acquired during the bankruptcy term are also lost.
Can I keep my bank account?
IVA: Yes, although you may lose some extra facilities such as your overdraft.
Bankruptcy: No, all your bank accounts, credit cards will be closed and any hire purchases will be cancelled.
Am I legally protected against my creditors?
IVA: Yes, no court proceedings can be brought against you once you have been accepted for an IVA. UK creditors may start bankruptcy proceedings against you if you fail to keep up your monthly payments.
Bankruptcy: No, your creditors may sell your assets and they are also allowed to take any action they deem necessary against you.