AIternative to Bankruptcy - Individual Voluntary Arrangement (IVA)
Q: Is there any alternative to bankruptcy?
A: Yes, the debtor can choose IVA. IVA is a formal procedure under the Bankruptcy Ordinance to provide an alternative to bankruptcy. A debtor makes a repayment proposal to the court and the creditors. If it is approved, it will legally bind all creditors.
Q: What are the advantages of IVA?
A: (a) A debtor can avoid the stigma of bankruptcy. He/She will be free from the legal restrictions provided for under the Bankruptcy and other Ordinances and may be able to retain his/her job/profession.
(b) For the creditors, as compared with bankruptcy, they may expect better repayment from the debtor as the latter would have more incentive to make repayment.