Have you ever considered the pros and cons of an IVA?
The good people at debt advice providers, MoneyPlus have looked at this in depth and it is definitely worth reading about, and informing yourself, before you embark on this route. You could learn a lot from reading their page on IVA pros and cons and it will help you make a more informed choice.
Let’s take a brief look at some of the key things you need to know.
What are the benefits of an IVA?
An IVA is an Individual Voluntary Arrangement to help people struggling with debt. AN IVA does not see all your debts written off, unlike bankruptcy, but you also won’t have the weight and stigma of bankruptcy attached to your name.
With an IVA a a percentage of your debts can be written off can be if you stick to the terms of your agreement. They usually have a 5/6 year fixed-term and once you complete this term and meet all your obligations, any remaining debt included in the IVA is usually written off. What a relief!
Creditors tend to prefer IVA’s to bankruptcy because they are more likely to receive more of their money. For you the incentives are clear, creditors can no longer take legal action against you and you have a clear and fixed plan in place which can ease the pressure and the worry greatly. Your assets are also protected, as under an IVA you are not expected to sell your assets (like your home) in order to make your repayments.
Also, and a huge benefit to any one in debt, interest and additional charges that you have been accruing will be frozen. This will stop your debt from spiralling and will reduce any sense of panic.
And, if you need ongoing financial advice reputable IVA service providers – such as MoneyPlus Insolvency will be there to support you with expert advice throughout your agreement period, which is, in itself, a service worth it’s weight in gold to people struggling with their financial commitments.
What are the cons of an IVA?
There are not too many downsides to an IVA when it comes to managing your debt. It is however important to be mindful that your credit score will be affected negatively. Credit card, loan and mortgage applications are more likely to be turned down and any borrowing you do during this time will have to be approved by you IVA insolvency manager if it is over £500. Only unsecured debts can be managed by an IVA and you do have to stick to it’s terms to avoid bankruptcy.
An IVA is also not private and will appear on the public Individual Insolvency Register.
Do you think having considered the pros and cons of an IVA it could be right for you?