An IVA, or individual voluntary arrangement, is an effective method for dealing with debt in certain situations.
Like any debt solution, it has disadvantages as well as advantages. So let’s look at the pros and cons of an IVA.
Pros
- An IVA allows you to pay off your debt in affordable monthly amounts.
- An individual voluntary arrangement stops or prevents legal action from your creditors.
- You can be debt-free in 5 years with an IVA.
- With an IVA you are likely to keep your key assets such as property.
- Whatever amount of debt is left at the end of the IVA is written off.
Cons
- If you fail to keep to the terms of the IVA, for example, you miss your regular payments, your creditors might petition for your bankruptcy.
- As an IVA is a legal process - it may affect the terms of your employment or any hire purchase arrangements you have.
- If your IVA fails, the cost of it will be added to your overall debt.
- An IVA will affect your credit rating for six years from the date it is agreed.
IVA help
Use our online debt counselling service, CCCS Debt Remedy, to find out if an IVA could help your situation. We can identify the most appropriate debt solution for you circumstances.