Getting a debt relief order or IVA is a legal arrangement that stops creditors taking further action against you. It can be a good option for those with a lot of debt. However, you should be aware that getting one can impact your credit rating. In addition, you may find that it is difficult to obtain financial products and services. If you choose to enter an IVA, you will need to make monthly payments.
In most cases, IVAs last five or six years. However, if your situation improves, you may not have to enter one. This may happen if you have been able to increase your income, or if you can afford to make more payments. If you fail to make your IVA payments, your creditors may request that you file for bankruptcy. This may impact your career prospects.
The type of debts that can be included in an IVA are limited to unsecured debts. This includes credit card debts, store cards and personal loans. Debts secured against your home or car cannot be included. The debts that are included in an IVA must have been incurred at least two years before you decide to enter an IVA. You should also be able to afford to make monthly repayments of less than ninety percent of the total amount of debt that you have.
An IVA will remain on your credit file for up to six years. It will be listed on the Insolvency Register, a public database that anyone can search. The IVA will have a negative impact on your credit rating, but it will also protect you from creditors taking further action. You should also be aware that you will be required to release some equity from your home if you have a mortgage. This may require you to sell some of your possessions or remortgage the property.
If you are unsure whether an IVA will help you, you should contact an insolvency practitioner. They will be able to offer advice about how the IVA works and how long it will last. They will also work out how much you should be paying each month. The IVA is based on your income and expenses and will be adjusted periodically to ensure that you are able to make your repayments. It is important to inform an insolvency practitioner if you are having difficulty making your payments.
If you work in a professional or disciplined environment, you may have to disclose your plans to your employer before you file for IVA. However, most people can enter an IVA without impacting their career prospects. In addition, a professional working for a financial institution may have to be careful about who they work with.
The process of getting an IVA can be very confusing. It is important to read the review letter carefully before you sign up. You should also inform your IP immediately if you are having trouble making payments. If your IVA fails, you will be responsible for the full amount of the debt owed to your creditors.
The Impact of an IVA on Your Credit Rating was first seen on Help with My Debt