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F E Smith
F E Smith, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 10257
Experience:  30 years in general practice.
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What is the diference between IVO and bankruptcy? what are

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what is the diference between IVO and bankruptcy? what are the effects and benefit of each?

Do you mean an IVA?

Customer: replied 1 year ago.

Yes sorry for the error

An IVA is a commitment to pay an amount of money which is usually a percentage of the debt, and to pay that either in a lump sum (single payment IVA) or to pay it regularly over a period of time, usually five years.

Bankruptcy on the other hand is not a commitment to pay anything and all debts (apart from a few debts such as maintenance payments, court fines, and student loans) are wiped out. Bankruptcy draws a line under repayments except for those exempt ones I mentioned.

Many people enter into an IVA thinking that they can keep up the payments but very often they struggle to do so, default on the repayments, the IVA fails and the next step is bankruptcy anyway. Hence, a large number of IVAs fail and the person goes bankrupt anyway.

There is not as much social stigma in entering into an IVA as Bankruptcy although either of them will effectively trash a credit rating.

Whether a person enters into an IVA or Bankruptcy depend on what assets they have what income they have currently and are likely to have in the future.

Here is a page from Step Change, the debt management charity.

Can I clarify anything for you?

Please rate the service positive.

The thread remains open for further exchanges.

Best wishes.

Customer: replied 1 year ago.

Thank you.

I incurred a lot of debt through divorce. My solicitor failed to distribute the debt incurred my ex at FDR hearing saying that I would be able to deal with it with the lump sum award and it's be better for me to end the hearing to save legal cost. But unfortunately he would not release the lump sum claiming that I had used it up in legal fees. he would not give me breakdown and previously before he said I had paid my bills through the regular monthly payment and I would get all of the money. Now everything I own is at risk. I have a decent income and a house with some equity in it. I also have a property that the court allowed me to keep for my son. The property is in a state of disrepair. if this property is done up it could generate decent income too.

Is IVA the only solution in this case? I can't afford to go bankrupt because of my profession. Is there any other solution in this case other than IVA?

The only other solution would be a debt management plan whereby the creditors would hold off any enforcement action, and suspend interest and take a lesser sum of money provided you agree to pay the whole amount.

If you search Debt Management Companies, will find a lot of them.

Meanwhile, it would certainly be worth contacting an insolvency practitioner who could take detailed instructions and advise you in depth.

Please don’t forget to rate the service positive. Best wishes.

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