Getting an IVA can be a good move for many borrowers, but it’s not without its downsides. Before you commit, it’s important to understand the pros and cons of an IVA, as well as the difference between an IVA and bankruptcy.
An IVA is a legally binding agreement between you and your creditors, which will help you pay off your debt. It can last anywhere from five to six years. The IVA will allow you to pay back your creditors at a reasonable rate, and can make your life easier by removing the stress of owing money. This is particularly helpful for those who have been harassed by creditors.
Aside from reducing your debt, an IVA is also a good way to avoid legal action. During the IVA, creditors cannot contact you or take legal action against you. This will help you protect your property and your assets. It’s also important to know that if you miss a payment, your credit rating will take a hit. This can be a major financial problem, especially if you need credit in the future.
During the IVA, you will have to stick to a budget, and you’ll be required to make monthly payments. These payments will be based on your income and living expenses. They won’t be as substantial as the monthly payments you’d have to make if you were living on credit. You may not be able to save as much each month, and you may have to sell your home. This can make it difficult to keep up with bills, but you’ll be relieved of the stress of owing money.
Another good thing about an IVA is that you’ll be able to keep your job. You’ll have to pay back a percentage of your debt to your creditors, but you’ll be able to keep working. Unlike bankruptcy, an IVA does not require you to sell your home. In fact, if you’re unable to afford to keep up with your mortgage payments, a mortgage broker or bank may seize your home.
An IVA will show your creditors that you’re making a good effort to repay your debt. It will also help you re-establish your credit score, which can be difficult to do if you’re behind on payments. However, it’s important to understand that an IVA can only help you out of debt, and that the IVA will not make you eligible for new credit.
The IVA will also freeze interest rates and charges on your debt. This is the best way to keep your debt under control. In addition, it will make debt settlement much more affordable. It also makes it easier to avoid bankruptcy.
While there’s no way to completely avoid debt, an IVA can help you get a fresh start with your creditors. It will make your payments easier to manage, and will also show your creditors that you’re making ‘best efforts’ to pay back your debt. You may also find that your credit score increases a bit, especially if you manage to pay off your debt as part of your IVA.
IVA Pros and Cons – What Are the Pros and Cons of an IVA? was first seen on Debt Worries