There are both pros and cons to an IVA. For one, it’s a legal arrangement that requires both parties to keep to a budget. This makes the payment plan more manageable and means fewer chances of failure. Another pro is that you can adjust the payments to suit your changing circumstances. And because an IVA is a legally binding agreement, the companies you include in the plan can’t take legal action against you if you don’t keep up with the payments.
As with any legal action, the Pros and Cons of an IVA are different for everyone. For some people, the most important aspect of an IVA is the protection it provides from creditors. Another benefit is that you can continue working while still protecting yourself from bankruptcy. But for others, it can be a burden.
Another pro of an IVA is that you can keep your assets. You will be required to make monthly payments that are affordable. You will be assigned an Insolvency Practitioner to help you in this process. This person will distribute the payment between your creditors. There are also strict rules for an IVA, which can put your job at risk. You should always check your contract of employment before starting an IVA. The amount you will have to pay depends on your circumstances, but it can be as low as PS70 a month.
As an IVA is a legal agreement, you cannot cancel it once it has begun. Creditors don’t like this, as it adds commitment to the process. Make sure you’re sure that you’re going to stick to it, though. That way, you’ll have less stress and a higher chance of getting back on your feet financially.
Another pro of an IVA is the protection it gives your credit. The agreement will protect you from being sued by creditors. It can last for up to five years, which is longer than bankruptcy and requires minimum repayment. It can also save you from dealing with your creditors directly. The best way to assess the benefits and drawbacks of an IVA is to decide if it’s right for you.
Another benefit of an IVA is the partial write-off you can receive. Depending on how much you owe, this can be as much as 60 or 70 percent. However, you should also be aware that entering an IVA can hurt your credit score. A bankruptcy filing will also take years to clear, so you should make sure you’re confident about your ability to repay.
The most obvious benefit of an IVA is that your house is protected from creditors. You won’t be forced to sell your house, but you may be asked to remortgage it to free up equity for your unsecured creditors. The IVA will also last for five to six years, so you may want to decide whether you can afford it.
Pros and Cons of an IVA was first seen on Help with My Debt