Advantages of Individual Voluntary Arrangements
by: Hollie Wilcox
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Word Count: 382
Perhaps the most attractive advantage of an IVA is the flexibility that it gives the debtor. An IVA may include assets that would not be included in a bankruptcy. These assets might include income from trading their employment as well as third party funds. The debtor actually has more control as to how their assets are used. Additionally certain assets may be exempt from the individual voluntary arrangement. Specifically, your home could fall into this category. These restrictions are considerably less than what a debtor would experience with a bankruptcy.
There is much publicity that is associated with a bankruptcy. Bankruptcies are public knowledge and posted and in local newspapers. However and individual voluntary arrangement is a private matter. Also there is not the same degree of stigma if any associated with an IVA. If a business has entered into an IVA, they still have the flexibility to continue operations and bring in money. Typically the process involve with creating an IVA is much less expensive than bankruptcy. This is welcome in these situations as the debtor is experiencing financial strife.
The affects of an individual voluntary arrangement are not as far reaching as those of bankruptcy. Individuals who have sought an IVA may still participate in activities normally prohibited to those who have filed bankruptcy. Debtors with IVAs may still hold public office. They may also enlist and serve in the armed forces. They can also still hold a position as a company director and maintain their professional status.
Another bonus of seeking an individual voluntary arrangement is that in order for the proposal to be approved it must receive approval of creditors holding a minimum combined total of 75% of the debt. This is helpful if a creditor holding a smaller amount of debt does not find the terms of the individual voluntary arrangement suitable. If enough votes are gathered their disapproval does not matter.
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