Confidentiality and an IVA - Who is notified
One of the key reasons many people do not wish to declare themselves bankrupt is the stigma that
may be associated and how people will react if they find out. Therefore, who gets advised of an IVA
is very important to many people.
Bankruptcy and who needs to know
When an individual is declared bankrupt for example, the fact is published in the London Gazette
and will also be entered into the Insolvency Register. It is possible that details may be published
in the local newspaper, though this is not always the case. Whilst employers are not notified directly,
it is important for anyone considering bankruptcy to check their contract as there may be a clause
stating that an employee cannot be declared bankrupt. This is often the case in certain professions,
for example accountants. As Bankruptcy is in the public record, then it is possible an employer may
find out if not notified, especially if they routinely run credit checks. Therefore it is important for
an individual to discuss with their employer, or Landlord if they are a tenant, the impact bankruptcy
A popular alternative to Bankruptcy is often an Individual Voluntary Agreement (IVA). These generally
have less of a stigma associated to them, and generally, no-one needs to know about the IVA apart from
the debtor, the creditors, the debt advisor and/or the Insolvency Practitioner (IP). Unlike Bankruptcy,
there are rarely any stipulations by employers that an IVA is not allowed, although it is always worth
reviewing any contract of employment before entering any agreement.
Unlike Bankruptcy, an IVA will not be reported in the London Gazette, nor will it appear in any local
newspapers. It will however be entered in the Insolvency Register, and it will of course be noted on
the credit record of the individual. However, no one else is notified, and as any discussions between
the debtor, their creditors, the debt advisor and the IP are strictly confidential as they are governed
by the Data Protection Act, there is no reason why anyone will find out. Whilst the Insolvency Register
is a publicly accessible document, it is highly unlikely family and friends will ever look at it.
Landlords and Mortgage Lenders
If an individual is a tenant, then rental payments are taken into consideration when calculating the
IVA repayment amount, so there should be no need to discuss the situation with the landlord. This also
applies to homeowners with a mortgage, the lender need not be notified as repayments will be kept,
although if there is any equity in the property, the individual may be expected to release some of the
equity before the end of the IVA term.