IVAs 'can be an effective way to manage debts'
Published On 2 May 2008
People in debt might be better off opting for an IVA rather than declaring themselves bankrupt, an industry exert has said.Anna Sofat, founder of ADDIDI Wealth, explained that IVAs allowed people to maintain some control over their finances and could be the best option for people in difficulty.
Ms Sofat was commenting after figures from TDX Group indicated that over one million people in the UK have unsecured debts of over £25,000.
She explained: "[An IVA] is a better option than declaring yourself bankrupt, because you retain an element of control. Some of the debt is written off, and some of it you agree to repay."
However, Ms Sofat said that the decision to opt for an IVA would always depend "on personal circumstances".
"I would not advocate anybody to take that route lightly because you have consequences for your credit history. Individuals need to sit down and take some advice and there are lots of financial organisations that will provide advice," she added.
Figures from the Insolvency Service indicated that 42,165 people took out IVAs in 2007.
