n cases where a person owes a huge amount of debt than what they are presently repaying, they are forced to declare insolvency. After that, they have 2 choices available to them to clear off their debts. If possible, they can go for individual voluntary arrangement (IVA) as agianst bankruptcy as both of them can make different impacts on a person’s life, in spite of their similarity. IVAs are quite a recent development, as it was introduced after the Insolvency Act of 2000. So people have understood its advantages and its effects only after some time. Since more people are becoming aware of this choice, there has been a marked increase in the number of people who have started taking benefit of the IVA option.
There are various reasons for people opting to go for an IVA instead of bankruptcy. The primary reason is that under an IVA arrangement the debtor can keep his assets. This is because in an IVA the debtor can reach agreements with their lenders to repay them. As against this, in bankruptcy the debtor’s assets are taken away from him to be sold off to repay the debts. The legal inferences for each option differ, with bankruptcy having major harmful effects than an IVA. However many high street lenders consider both the categories of applicants unacceptable for loans, due to their effect on a person for the remainder of their lives.
Once you have completed the painful process of either declaring bankruptcy or opting for an IVA, you have to take charge of your financial future. Though declaring bankruptcy disallows you from taking specific actions it is still possible albeit difficult, to apply for a mortgage. The situation is a bit easier if you have entered into an IVA with your creditors, though it is comparatively more difficult than regular. In this case, it is better to go to a company who deals exclusively in this type of loan as rejections from other lenders can tarnish your record. Keep in mind though that you are not the sole person facing this situation, or else the bad credit market will not be increasing at this steep rate.
Most people think that getting a mortgage after entering an IVA is impossible, but it can be done. Entering an IVA has better chances of letting you retain your house instead of declaring bankruptcy. Those who have entered an IVA, a mortgage will let them repay a part of their debt. This type of mortgage deals for which you can qualify depends on the stage of the IVA you are at or how long ago you exited your IVA. The IVA mortgage is very helpful in repaying your creditors quicker than normally you could.