Personal Bankruptcy Slipping as Primary Insolvency Solution

With personal debt in the UK continuing to spiral out of control, more cases for personal bankruptcy will almost certainly be filed. However, the most feared of all financial procedures will soon become only the second most popular solution for personal insolvency.

According to statistics from Credit Action, the number of people applying for an Individual Voluntary Arrangement (IVA) grew at a rate of 118% in 2006. The estimated number of insolvencies for 2007 has risen to 150,000 and for the first time ever, it s been predicted that more of these will be serviced by IVAs than Bankruptcies.

But is an IVA really a more effective tool for servicing insurmountable amounts of debt than bankruptcy? Obvious advantages are that in most cases, people who apply for an IVA manage to maintain ownership of their properties and also avoid the public humiliation of a bankruptcy.

On the other hand though, many financial experts have gone on record as saying that many debt companies only forward IVAs as a lucrative solution, to benefit themselves financially from putting the agreement together.

In reality, you have to determine whether you can even afford to meet the terms of an Individual Voluntary Arrangement i.e. the monthly repayments before you can make the decision to file for the procedure. In some cases, a personal bankruptcy can be the only way out for people with tremendous debt and no possible way of paying even a small amount back to the creditors.

If you do have massive amounts of debt and are contemplating a personal bankruptcy, then you can find useful information at the Personal Bankruptcy Site.