Clear Start.org Discovers That People Are Taking Positive Steps To Resolve Their Debt Problems

The Individual Voluntary Arrangement (also known as an IVA) was introduced as an alternative to bankruptcy by the Insolvency Act of 1986 which recognised that debt was becoming a growing problem in the UK.

Indeed, even in the second quarter of 2005, the number of individual insolvencies increased by 12% since the previous quarter and by 37% since the same period a year ago.

However, the growing popularity of individual voluntary arrangements (IVA) suggests that people are prepared to take positive steps to sort out their debt problems, and that they would rather do this than have to declare themselves bankrupt.

In the second quarter of 2005, 4,199 Individual Voluntary Arrangements (IVA) were signed, which represents an increase of 24% on the previous quarter and 70% on the corresponding quarter of the previous year.

Until very recently when people were overwhelmed by debt, bankruptcy was the only solution. However, the introduction of the individual voluntary arrangement (IVA) and its growing popularity has created a new alternative to bankruptcy which is beneficial for both the debtor and the creditor.

An individual voluntary arrangement is advantageous for both sides because there are no fees or legal proceedings involved with an individual voluntary arrangement (IVA), unlike with bankruptcy. Moreover, from the creditor's point of view, an IVA offers a greater repayment of the debt than would otherwise be achieved if the debtor were made bankrupt.