Benefits of IVA

Some of IVA (Individual Voluntary Agreement) benefits

An Individual Voluntary Arrangement (IVA) is a contract that can be used instead of filing for bankruptcy. A professional insolvency practitioner (IP) makes a written agreement between you and your creditors to return a portion of your debt without the negative consequences of bankruptcy. However, you should be aware of the benefits and drawbacks of the IVA before applying.

Benefits of IVA

For those wishing to pay off their debt through avoiding bankruptcy, then applying for an IVA online is right as well as viable choice to get rid of debt fast and manageable way. 

IVA gives benefit of Affordable Monthly payments

If you choose IVA as your debt relief formula in such case. Your choice of IP will examine your expenses & income to determine how much you’ll pay each month based on your unique circumstances. This arrangement of payment makes it more convenient to repay your bills at a reasonable pace.

IVA protects your assets from liquidating.

It’s practically a given that someone filing for bankruptcy will have to liquidate personal belongings like a car or a home. When you apply for an IVA, your personal assets will be reviewed, and they will be protected more than they would be in a bankruptcy, so you shouldn’t have to sell them to pay off your obligations.

Iva gives benefits of freezing all your interest rates.

Once the IVA is placed, all your interest and charges related to debt and even creditor pressure are suspended. If an IVA is approved, all parties are bound by it, even if one or more creditors did not agree to the proposal even then they can’t ask or call you regarding repayments or interest during the IVA duration.  After the agreement is in place, the IP will deal with all of your creditors, saving you time and hassle.

After the IVA, unaffordable debt is written off.

In most cases, an IVA lasts five years, after which any residual debt is wiped off as unmanageable. This could result in a significant reduction in the amount of debt you owe. It relieves the stress of not knowing how you’ll pay off your debts because they’re reduced in size to meet your budget while still allowing creditors to get paid.

IVA have benefit of no upfront charges.

Rather than charging an upfront cost for our IVAs, we deduct our fees from your monthly payments. This amount is unique to you and dependent on your financial situation.

Drawbacks of IVA

So, those are some of the most important IVA benefits. Before filing for an IVA, make sure you understand the agreement’s implications and how they will affect you and your finances in the future.

Creditor clearance is required.

To be successful, the IVA must receive permission from creditors who own at least 75% of the debt’s worth. If creditors do not believe the IVA proposal would provide them with a higher return than bankruptcy or another debt relief alternative, they may reject it. You’ll have to look into other options like Debt management plan or bankruptcy depending upon your location after that.

The IVA is made available to the general public.

An IVA is made public and listed on the Individual Insolvency Service register, just like a bankruptcy. Your information will be kept on the registry for the duration of your IVA and then erased three months thereafter. If you work in particular industries, this public nature can have ramifications. So, if you’re unsure, consult your employer or trade union.

It is a legally enforceable agreement.

An IVA is a formal agreement that is legally enforceable, notwithstanding the fact that it allows for certain flexibility. As a result, the IP and creditors will expect you to make your payments on time. Failure to do so may result in the IVA failing and, in the worst-case scenario, bankruptcy.
The fact that the IVA is legally binding has the added benefit of providing more protection from creditors and bailiffs.

Not appropriate for all debts

While IVAs might be immensely beneficial in the case of unsecured debts, they aren’t a one-size-fits-all answer. IVAs are often used for debts of more than £10,000; anything less may not be appropriate. Certain debts, such as secured obligations, child support, and school loans, cannot be included.

Your credit score will be affected.

An IVA will have a negative influence on your credit score and may make it more difficult to obtain more credit. If you want to borrow more than £500, you’ll need to ask your IP for approval. The information of the IVA will remain on your credit file for six years after it is completed.

What am I supposed to do now?

I hope by now you must have understand what are the possible benefits of IVA and some information about about how and why IVA is the good option to choose if you are looking to settle your debt effectively and easily. Here at IVAOnline we try to resolve all your IVA related Issues and guarantee you to make your financial journey much easier than previous. 

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