| Does An IVA Come With A Social Stigma? |
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There has always been a social stigma involved in declaring Bankruptcy. Amongst older people especially it is seen as the worst in financial failures. People assume that bankruptcy is a result of somebody not managing their money properly or making lots of unnecessary purchases and not really being very savvy financially. Most of the time this could be true, but sometimes it is not always the fault of the individual that they have ended up in such dire financial straits, but it could have been due to an emergency or something completely out of the individual's hands.
There has always been a social stigma involved in declaring Bankruptcy. Amongst older people especially it is seen as the worst in financial failures. People assume that bankruptcy is a result of somebody not managing their money properly or making lots of unnecessary purchases and not really being very savvy financially. Most of the time this could be true, but sometimes it is not always the fault of the individual that they have ended up in such dire financial straits, but it could have been due to an emergency or something completely out of the individual's hands. An IVA is a good alternative to bankruptcy. It is an arrangement that is legally binding where the debtor pays off a set amount over an agreed number of years to their creditor, usually this is a 5 year period. They repay based upon their income i.e. only what they can actually afford, and this usually leads to them paying less than they owe. The debts are then seen as settled at the end of the time period. But does an IVA come with the same social stigma attached as bankruptcy does? To a certain extent there is. There are many people who would still see this as a financial failure. Would you really want to be getting IVA advice from your friends in the pub? It still means that somebody taking out an IVA has got themselves into more debt than they can handle. However an IVA is different to a bankruptcy because it will not be printed in the local press. It means that an IVA can be kept private apart from your creditors and yourself, which can be an immense weight lifted. As well as this, some of the stigma of bankruptcy comes from the fact that it can be seen as running away from your debts. If you are made bankrupt, often you will pay nothing back - simply because you have nothing with which to pay. With an IVA the debtor is making the maximum contribution they can realistically afford, therefore it is seemingly less like "avoiding paying back," money owed. Debt seems to be a bit of a taboo subject in general. An IVA has much less of a social stigma than bankruptcy, but as we know debt is a hard topic for us to talk about openly. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. James Robinson is an expert in financial matters and iva help |