Should I file a bankruptcy or an IVA?

In order to determine if it would be in your best interest to file a bankruptcy or an IVA you need to evaluate your current financial situation and truly know the differences between the two debt management tools.

An IVA is defined as an Individual Voluntary Arrangement. This arrangement is an arrangement that is made between you and your creditors. During the arrangement you sign an agreement agreeing to pay a certain percentage on what you owe to your creditors typically for a five year period. The amount is fit into what you can afford, not what the creditors demand.

A bankruptcy on the other hand can take a lot of different paths. Depending on the chapter of bankruptcy you file, depends on how long it will take you to regain your credit independence. Many people choose bankruptcy because they figure that it is the only way that they can eliminate their debt. Bankruptcies can have a tremendous impact on your life for years after it has commenced. A typical person that files bankruptcy takes anywhere between seven to fifteen years to repair their credit history and to get a credit score they can be proud of.

With an IVA, you are basically put into an agreement to repay the debt that you feel you rightfully owe. You pay the amount that you can afford to pay each and every month for five years. You are making a positive impact on your credit the whole time you are involved in an IVA.

An IVA gives you a chance to redeem yourself with your creditors, instead of writing your debt off by going through a bankruptcy. With an IVA you are rebuilding yourself, and rectify your borrowing incompetence. You are showing the creditors that the contracts you signed with them in the beginning are still words you stand by. You wish to repay what you owe.