There are many advantages to an IVA but there also some drawbacks. An IVA is a good debt solution if you are suitable for it however it does not suit everyone. If you contact one of our advisors we will be able to assess your individual situation and advise you on the best way to proceed for you set of circumstances.
Pros
- Creditors who vote against your proposal are still bound by it
- Creditors whose lending is unsecured can’t take any further action
- Interest is usually frozen as long as you keep up your payments
- Our insolvency practitioner will prepare your proposal, including agreeing the level of your household and personal spending based on guidelines acceptable to creditors.
- You only make a single payment each month or quarters. The insolvency practitioner is responsible for administering and distributing your payments.
- The terms of an IVA will usually enable you or your spouse or partner or a relative to make arrangements to buy your share of the net worth of your home or to make extra payments, rather than the home having to be sold. This may be done through a remortgage or a loan. (Net worth means its value after any debts secured on it have been paid.)
- On completion of the IVA, the balance of what you owe your creditors is written off.
- You may be able to continue running any business you have.
Cons
- Your IVA is entered on a public register
- If there is some equity (value) in your home after taking account of the mortgage(s) on it, you will probably have to pay for your share, usually in the fifth year of your IVA, by remortgaging the property. If you can’t get a remortgage, you may have to continue making monthly or quarterly payments from your income, for up to another year.
- If you circumstances change, and your practitioner can’t get creditors to accepted amended terms, the IVA is likely to fail. You will then still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your IVA.
- If your IVA fails, you may be made bankrupt.
- An IVA will affect your ability to obtain credit and will remain on your credit file for 6 years.
- You will not be allowed to borrow additional credit during the term of the IVA
Contact us today on 0800 121 48 63 to see if an IVA would be suitable for your situation.
