Consumer Money Worries - Personal Debt

Browse our support and services for consumers who are struggling with personal debt

Difference between Bankruptcy & an IVA

Both the IVA and bankruptcy are forms of insolvency with apparent differences.

An IVA is a legally binding arrangement that lasts for a usual period of 5 years, giving the consumer the breathing space to repay their debt.

With an IVA, you pay one affordable monthly payment for a fixed period, and the remaining debt at the end of that period is written off. 

An IVA protects the consumer from legal action and all assets; it provides a light at the end of the tunnel. 

In most cases, bankruptcy supports a full debt write off but also puts assets at risk. 

There are more restrictions and monitoring of financial affairs with bankruptcy, whereas with an IVA, your financial situation is reviewed every 12 months or when there is a change. 

Both options restrict you from taking out or using available credit; both solutions are geared around getting you debt-free. 

Bankruptcy lasts for 12 months; however, you could be expected to declare it for up to 10 years. The insolvency practitioner managing your IVA will provide a certificate of completion at the end of the IVA.

Once the IVA has been completed, your debts will show as satisfied, and you can focus on rebuilding your credit file. 

If you are unsure which solution best suits your needs, we are here to help, guide, and support you. 

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