Is there a difference between bankruptcy and IVAs when you have a CCJ?
Declaring Yourself Bankrupt
When you are suffering financially, you will be bombarded with acronyms left, right and centre. Sometimes these will be helpful in helping you out, but most of the time it just adds to the confusion you face.
IVAs are Individual Voluntary Agreements. These are formed between the debtor and the creditors. Normally you will be able to negotiate a solution to your debt problems with the companies you have borrowed money from. They will take account of your whole financial situation and create a viable solution that will allow you to pay off your debt and carry on with your normal everyday life. The agreement could be over a 12-month period, but they are normally designed to be completed within five years or sixty months.
Declaring yourself bankrupt or even being declared bankrupt by the courts is a different solution to your financial issues. You must demonstrate that you do not have the assets or capital to pay off your debts. The court will declare you bankrupt and remove all of your debt. A bankruptcy order in the UK will last for 12 months and will come with further stipulations concerning your future financial dealings and transactions.
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There is no need to worry about your financial future if you make a secure plan today
CCJs are County Court Judgements aimed to ensure that a debt is paid. The court will review the transactions that created the debt and decide on if and how it should be paid. They will set out a payment plan which must legally be followed.
If you have a CCJ you might not think that you can enter into an IVA or Bankruptcy. You might not be sure how all of your debt will be handled.
Both will incorporate your CCJ and deal with all of its issues. The difference is that Bankruptcy will eliminate your debt and whilst an IVA will create a manageable repayment schedule for you to complete.
There is no need to worry about your financial future if you make a secure plan today.
IVA, or Individual Voluntary Arrangement, is a system under which persons under debt voluntarily make a repayment proposal to the creditors in order to avoid bankruptcy. This arrangement will be legal and binding after approval of the court. The monthly payments will be based on the level of your disposable income.
How to set up an IVA The first step is to consult an Insolvency Practitioner, usually a lawyer or accountant, who will help you work out a monthly plan. It is important that this person is given complete information about your financial standing so that they are able to make decisions based on this information. Your insolvency practitioner will consult with your creditors and work out a mutually satisfactory repayment plan that you can afford. This plan can go ahead only if 75% of the creditors accept it.