IVA's - The Benefits and Drawbacks

IVA Pros & Cons

All debt solutions have their pros and cons and IVA’s are no different. We’ve picked out the main advantages and disadvantages you should consider when thinking about an IVA as a viable debt solution:

IVA Advantages

• Once your IVA has been accepted, all further interest and charges will be frozen
• Your creditors will agree to write off a portion of your debt which you cannot reasonably afford to pay back – this could be as much as three quarters of your overall outstanding debt
• You will normally be able to stay in your home (you may have to release any equity in your property which will be put towards repaying your creditors)
• The IVA won’t jeopardise any reasonable assets you have. For example if you need your car to commute so you can afford to pay your monthly contributions.

IVA Disadvantages

• Agreeing to an IVA means that you are committing yourself to a 5 year payment plan
• If you own your home, then you will have to release any equity in it for the benefit of your creditors
• You could be made bankrupt if you fail to maintain your IVA payments without a valid reason
• For the duration of your IVA you won’t be able to take out any more credit
• Your IVA will adversely affect your credit rating for 6 years
  

If you’d like to discover more about any of the IVA advantages or disadvantages listed above, or have any other questions, please call us now on 08000 43 43 41 to speak to one of our friendly advisors in confidence or complete our IVA Wizard and see if you qualify for an IVA.