At the moment people are considering the merits and potential issues with an individual voluntary arrangement.
This is due to the fact that the IVA is becoming how much more popular financial solution for people facing insurmountable debt which leaves them in a situation .
What is an IVA?
And IVA otherwise known as an individual voluntary arrangement is a financial solution which enables people to clear debt in many cases people can write off up to 85% of debts due to the legal powers of the arrangement.
This debt solution has the power to clear debt under the insolvency act 1986, which involves speaking to creditors and renegotiating monthly repayments to consolidate monthly bills down to 1 manageable monthly repayment.
It also protects people in debt from being chased by creditors through the use of what is known as an interim order which is a legal injunction protecting the person in debt from creditor harassment and excessive chasing.
When it comes to the pros and cons of an IVA all the advantages and disadvantages of an IVA there are many advantages but only few disadvantages.
Advantages of an IVA
1 with an IVA all monthly payments are consolidated into one manageable monthly fee that is pre agreed with creditors before the scheme begins
2 on an IVA your creditors cannot hassle you and pressurise you into making further payments this is because you are protected from this legally buy your appointed representative in this case an insolvency practitioner
3 IVA is generally fast and easy to set up it takes few weeks from start to finish however your creditors must participate also, it’s a legally binding arrangement which protects you from hassle from creditors, bailiffs, and debt collection agencies.and even further court actions, which is a major concern for a lot of people in debt.
4 another IVA advantage is that your debts are written off once the IVA is completed
1 individual voluntary arrangements can be quite restrictive for individuals who wish to have a more elaborate lifestyle than they can afford, for example you cannot really take out more credit whilst on an IVA this is because part of the whole point of an IVA is that you avoid getting into further trouble financially.
2 IVAs require significant commitment from the debtor to stick to a repayment schedule as stipulated in the terms of the initial contract, if if this is not honoured then it’s can cause issues later on and the IVA could be broken and this could even lead to a bankruptcy petition.
The disadvantages of IVAs compared to the advantages are small however this does not mean the decision to take on an IVA should be taken lightly think carefully before committing to a debt solution because even though it is probably the best option if you are drowning under debt it is important to consider repayments and if you can keep to them.
For a full guide on “iva pros and cons” follow that page for further information.
Are ivas government supported?
Yes the IVA is a government supported debt solution which enables individuals to get out of debt much faster than if they had not participated in an IVA
The government IVA has become the most popular debt solution of recent times for UK residents, with people enrolling with £100,000 of debt and in many cases writing off in excess of £80,000 of that initial £100,000, which is an enormous amount of money for an individual who was struggling to meet household bills previously.