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IVA Pros and Cons
In this section, we’ll discuss the pros and cons of setting up an IVA.
If you would like to discuss IVAs in more detail with an IVA expert, then please:
a) Call us on freephone 0800 138 5445
or
b) Fill in this short form and an IVA advisor will call you back at a time that is convenient to you
IVA Pros
An IVA (Individual Voluntary Arrangement) Protects You from Further Legal Action
Your creditors are prevented by law from taking any further legal action against you or from bringing bankruptcy proceedings against you, once an IVA is in place. Of course if you don’t abide by the terms of the IVA then this will not apply.
Interest on your Debt is Frozen Once an IVA is in Place
Your creditors are not allowed to add interest or any other further charges to your debt once an IVA is in place.
Payment Demands are Stopped Once and IVA Has Been Set Up
Your creditors are not allowed to harass you for payments once an IVA has been set up.
An IVA is a Legally Binding Agreement
An IVA is a legally binding agreement. This means that once it has been accepted by your creditors they are not allowed to make any changes to it. As a result, you can be confident because you know exactly where you stand and when you will be free of debt.
With an IVA Your Debt is Reduced
An IVA normally enables the debtor to only pay back a percentage of the original debt.
An IVA Enables You to Pay Off Your Debt in Monthly Payments
An IVA lets you agree a monthly repayment amount based on what you can afford, with your creditors.
You Won’t Receive any Negative Publicity with an IVA
Unlike bankruptcy, an IVA is a private agreement with your creditors. This means that no-one outside the agreement needs to be told about the IVA and so won’t be any publicity in your local papers.
An IVA Doesn’t Affect Your Ability to Hold Public Office or Your Professional Status
Even if you have had an IVA you can still run for public office. Furthermore, you can have an IVA without your job being affected.
Once an IVA has Been Completed You are Debt Free
Provided that you have adhered to the terms of your IVA, once the IVA has been completed you are declared free of debt.
After Completing an IVA Your Credit Rating Will be Repaired
Whilst your IVA is in place you are unlikely to be allowed to borrow more money. However, when the IVA has been completed, you can borrow again and your credit rating will be repaired. In other words, with an IVA, you won’t be blacklisted for credit.
IVA Cons
You Can’t Borrow While the IVA is in Place
Whilst your IVA is in place, you won’t be allowed to use your credit or store cards. Furthermore, you won’t be able to borrow any more money until your IVA has been completed.
You Might be Asked to Release Home Equity if You Set up an IVA
It is possible that you might have to release some of the equity in your home (or in another valuable asset) as part of the IVA agreement.
An IVA Usually Runs For 5 Years
An IVA generally runs for longer than a bankruptcy, for five rather than three years.