Although their are many advantages to an individual voluntary arrangement (IVA), there are also some disadvantages. An IVA that is based on income can last up to 5 years, although it can be any length. On the other hand, bankruptcy is normally discharged after 1 year or less if the bankrupt is eligible for an early discharge. Bankruptcy payments are also usually less than an income based IVA. An IVA actually has the same effect on the debtors credit as bankruptcy does. The failure rate of IVAs are not currently reported on, but their failure is quite common. An IVA usually fails when a debtor is unable to keep up with the new terms of the contract.
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