| Is There A Social Stigma Attached To An IVA? |
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Bankruptcy has always had something of a social stigma attached to it. It is seen by many, particularly amongst the older generations, to be the ultimate financial failure. In many cases, it is also often assumed that bankruptcy comes as the result of someone mismanaging their money, operating poor spending habits and generally not being so financially savvy. Of course this is undoubtedly true in a number of cases, but there are situations where financial catastrophe can come about as a result of an emergency or circumstances beyond an individual's control.
Bankruptcy has always had something of a social stigma attached to it. It is seen by many, particularly amongst the older generations, to be the ultimate financial failure. In many cases, it is also often assumed that bankruptcy comes as the result of someone mismanaging their money, operating poor spending habits and generally not being so financially savvy. Of course this is undoubtedly true in a number of cases, but there are situations where financial catastrophe can come about as a result of an emergency or circumstances beyond an individual's control. One alternative to bankruptcy is an IVA. Essentially, this is a legal arrangement between a debtor and his or her creditors, whereby the debtor makes a set repayment for an agreed period, often 5 years. This repayment is based on what he or she can realistically afford and the total repaid often amounts to much less than what was originally owed. Nonetheless, at the end of the agreed time period, the debts are considered to be settled in full. But as with bankruptcy is there such a social stigma attached to an IVA? 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. The social stigma associated with bankruptcy is based on people thinking that you are essentially avoiding your debts and running away from your debts. Bankruptcy means that you will pay nothing back as you simply cannot do so. On an IVA you are only paying the maximum you can afford rather than avoiding to pay it back 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 ivas and financial matters |