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IVAs can be "better option" than bankruptcy

06/05/2008

Entering an Individual Voluntary Arrangement (IVA) can be a "better option" than bankruptcy for some people as the debtor maintains some power over their finances, an industry expert has claimed.

While IVAs should not be treated as a "get out of jail free" card, they can be helpful for consumers who are struggling with their finances but who do not want the reputation associated with bankruptcy, ADDIDI Wealth stated.

Anna Sofat, founder of the wealth management company, said that those considering entering an IVA must seek professional debt advice beforehand.

She added: "It depends on personal circumstances. I would not advocate anybody to take bankruptcy lightly because you have consequences for your credit history."

An IVA is an agreement between the debtor and their creditors, in which a portion of the debt is agreed to be paid over a five-year period. After that period has elapsed, the debt is written off.

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