A helping hand at a penniless state

As said by a wise soul, ' poverty is a punishment to a crime not committed'. Times keep on changing like the skies above. But when the changing times are really harsh, it becomes hard to manage the consistency of one's patience and wisdom. At least during the financial turbulences, we must have a helping hand to pull us out.

The state of bankruptcy is more or less a crime, the only difference is that it is not genuinely your fault to be a bankrupt.

When a person is stuck by bankruptcy, he is literally believed to be rendered penniless. At such a state, he can barely make both the ends meet. To make matters worse, the pressure of debts becomes immense.

The UK government has devised a system for such borrowers who have reached the stage of complete bankruptcy and are failing to scratch out enough funds to pay the debts. These schemes are called as the Individual Voluntary Agreements or IVAs in brief. Particularly formulated for people facing acute affects of bankruptcy, this plan facilitates the repayment of debts as soon as possible. The steps taken by the IVA are always unbiased and are in interest of both the debtors and creditors.

By the Insolvency Act of 1986, the IVA scheme was introduced by the UK Finance. This was an answer to the bothersome, embarrassing affects of bankruptcy. The IVA loans facilitate a negotiable talk between the debtor and the creditor.

The insolvency practitioner deal with the situations and normalise the mayhem between both the parties by solving the problem legally. Once a person is declared bankrupt by the court, he can propose an IVA.

A bankruptcy is announced in a local newspaper, but an IVA is not. An IVA is listed publicly on the Personal Insolvency Register and is recorded by the credit reference agencies. The IVA services can help you to reach a much lower level of debt and is usually a small fraction of your original debt. Moreover, till the time your IVA is valid, the creditors are not allowed to harass you. IVA is of great assistance to the bankrupt debtors as it actually freezes the interest so that your debts don't keep on growing. Being a bankrupt means your status would be publicly announced in the newspapers, hence that would be affecting your professional status and also your ability to hold a public office.

Thus, an IVA process is a lot less strict than bankruptcy and the consequences are much less grievous.