The Government’s Insolvency Service claimed that
27,644 people were either made bankrupt or
entered into an Individual Voluntary Arrangement
(IVA) as a way to control or manage their debts
in an ordered fashion.
It was too early obviously to know how big a
percentage of those who entered into an IVA had
it failed by their manager or supervisor but it
has been claimed previously that in some cases
up to 50/60 percent of those entering an IVA
fail to complete it in an orderly manner and
therefore find themselves being made forcibly
bankrupt at a later date.
The other key statistic was that insolvencies
were apparently 55% higher than during the
comparable period this time last year and the
smart money (to spoil the metaphor) is on the
figure topping the 100,000 mark for the year.
It would appear that the proportion of those
applying for and entering IVA’s rose as compared
to those deciding (or having decided for them)
to go down the straight bankruptcy route. This
latter fact has been heavily criticised (and
understandably so) by the mainstream press as
the process of an IVA or (Chapter 13 Bankruptcy,
its equivalent in the US) is very heavily
marketed as the ultimate solution to provide the
“maintenance of the maximum amount of dignity in
an otherwise sordid scenario”.
This is not entirely the case and is most
certainly not always true. Whilst the principle
of an IVA is fine and extremely noble, sometimes
it is just not practical and therefore should be
counselled against at the earliest opportunity.
That is not to say that IVA’s are a totally
worthless idea in principle.
In the right circumstances they are ideal and
managed correctly work extremely well for those
who enter into the process with their eyes
firmly open. Sadly this is not always the case
and most often the reality is the exact
opposite.
In part two of this article we will be taking a
look in some detail at the right way and
conversely the wrong way about entering into and
managing successfully an IVA.
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