An IVA is a type of debt settlement that allows you to pay back your debts at a rate you can afford. At the end of the plan, the remaining debt is written off, which can be up to 70% of the total amount you owe. You make your repayments based on your income and living costs. You will not have to worry about missing a payment, and you won’t have to sell off your property.
An IVA protects your assets and stops your creditors from pursuing legal action against you. It also protects your credit score. This is especially important if you have been harassed by your creditors. It is also a relief to know that you won’t have to deal with your creditors directly.
When choosing an IVA, make sure you weigh the pros and cons of a repayment plan. Consider your income, expenses, and debts and then decide if IVA is the right choice for you. It can be a good way to avoid filing for bankruptcy and keep your income steady. However, you should remember that it is possible for your creditors to report your IVA to the credit bureaus.
One of the biggest benefits of an IVA is that you won’t lose your home. If 75% of your creditors agree, your IVA will be legally binding. However, your home will be at risk if your creditors are not willing to accept the IVA. Therefore, you should make sure to re-mortgage your home within the last six months of your debt settlement. In addition, you should also consider that your monthly repayments will depend on your individual situation. If you are able to do so, your monthly repayments will be affordable. Another IVA benefit is that the contractual interest for your unsecured debts will be frozen.
Another pro of an IVA is that it is much more flexible than a bankruptcy petition. However, you should note that an IVA requires the involvement of a professional insolvency practitioner. This practitioner will charge a fee. Different practitioners may charge differently, but the fees are usually deducted from your monthly payment. Some practitioners may also ask you to pay these fees before setting up the IVA. The advice stage is usually free, but you must also account for supervisor and nominee fees.
IVA is the most popular debt solution in the UK, helping hundreds of thousands of people to manage their debts. It is a legal arrangement that allows you to make affordable payments to your creditors. You can also freeze interest charges and be free of any legal action against you while you repay your debt. However, an IVA can also have negative effects on your credit rating.
Another IVA pro is that you can keep your car if you’re in an IVA. However, you must make sure that you can afford it. Some occupations will not allow you to work with a bankrupted debt. IVAs are generally regarded as a better option than bankruptcy because creditors don’t have the power to send bailiffs to reclaim debt.
IVA Pros and Cons – What Are the Pros and Cons of an IVA? was first seen on Debt Worries