IVA’s and bankruptcy’s are both very powerful debt management solutions. You should proceed with great caution if you want to use either one of these two options. Also, you require expert help if you want to get any of the two.
Individual Voluntary Agreement (IVA) is a legally binding contract between a debtor and a creditor supervised by a Licensed Insolvency Practitioner. The parties must agree on a repayment plan. IVA also prevents creditors from increasing the interest rates. Usually debtors become debt-free within 5 years (the usual term set for an IVA agreement).
Bankruptcy, on the other hand, is a major undertaking that should be regarded as a last resort. The benefit of bankruptcy is you are free of the debts within 12 short months but on the downside you might lose your assets like your home, car, shares of stocks and other valuable properties. Your assets will be used to settle your debts.
Bankruptcy can either be voluntary or forced. It is quick to implement but restrictions on your financial activities could go on for years. You might also encounter problems in the future if you apply for a new mortgage or even if you apply for a job if you had gone bankrupt at some point. However, this is perhaps one of the final options open to you to be able to repay the money you owed. You may not have much choice over the matter but bankruptcy could be a huge help if you have no other alternatives left.
Regarding tenancy agreements, it is important to inform your landlord about the bankruptcy. Also some tenancy contracts specify that bankrupts cannot rent the property so you might be asked to move out of the property. If this problem happens, call the local housing office immediately, tell them your situation and ask for help.
With IVA, you do not face any risk to tenancy agreements if you are renting your place. But it will be good to check with your landlord if the agreement includes prohibiting tenants from entering into IVA agreements.
These are important things to consider once you are looking into the debt management solutions available to you. If you seek help from the experts, they can guide you through the process and provide you advices on your legal rights as a tenant and what is the best option you can choose given the circumstances you are in.
Posted March 5, 2010 by admin under consulting services