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Does this sound familiar?

No matter which way you see at it, your debts are so huge that the only solution is to file for bankruptcy. You must now say goodbye to all your possessions and hope that it will be enough to pay off all your debts. Your assets include the family home, which you are now likely be forced to move away. Are you in this plight right at this moment?

Before you jump to any sudden decisions, you have to be certain that bankruptcy is right for you. You may not be informed that your particular debt circumstances can be handled in a different way other than bankruptcy. To find out, you can discuss this with someone who is qualified to give you sound debt help. There are both paid debt advice services and charity groups who can help you see what your options are.

Ask your debt counselor about an alternative to bankruptcy, such as an IVA, or Individual Voluntary Arrangement. This proposal is put forward on your account by your agent, such as an Insolvency Practitioner (IP). Your proposal must contain a workable payment scheme for your creditors after taking some things into consideration, such as your monthly income, living expenses, and other pertinent facts, which greater number of your creditors must ratify in order for the IVA to push through. The terms of this offer may undergo several changes as petitioned by any creditor before the final vote is called. Once all your creditors accept the offer, you must keep to them throughout the payment period.

There are several advantages to an IVA, such as:

During the IVA case, no creditor on your list can take legal action against you without due permission from the court. However, any banks that you did not put on the list is not covered by this, so make sure that you have a comprehensive list of all your debts.

If you file for bankruptcy, everything you own will be taken into consideration and auctioned off, and the sale amount will go towards your debts. For IVAs, your assets will be left alone and you can keep your home.

Unlike bankruptcy, which is broadcast on the newspapers, persons who opt for an IVA are only listed on the Personal Insolvency Register, which is duly noted by credit bureaus. Thus, you avoid the disgrace attached to having filed for bankruptcy.

Generally, it would reflect better on you if you show that you are willing to pay back what you owe. However, an IVA doesn’t mean that your credit scores won’t go down, and while it will reflect on your financial records, in most cases you can still apply for credit. Normally, the payment terms last anywhere from three to five years, and it will be the listed amount set in the IVA. It will be up to your nominated representative to distribute this amount among your creditors.