An IVA is a legally binding procedure between the debtor and their creditors. If you are considering an IVA, it is important that you are aware of both the IVA advantages and IVA disadvantages.
- An IVA can write off unsecured debts that you cannot afford.
- Interest or charges frozen.
- You will not have to sell any major assets, such as your home.
- 60 months until you are debt free.
- One monthly payment based on your finances.
- Pressure from your secured creditors may be alleviated, as you won’t be paying as much on your unsecured debt.
- An IVA is a legal private agreement between you and your creditors and, unlike bankruptcy, your details will NOT be published in your local newspaper (although they will be available online).
- An IVA is legally binding, so your creditors cannot pursue you once the IVA has been accepted.
- You must have unsecured debts greater than £12,000.
- Missing payments means that creditors can take legal action against you, such as a bankruptcy.
- It is a five year repayment plan.
- At least 75% of your creditors who vote, must agree to the IVA proposal.
- You may be asked to re-mortgage your home to release a proportion of your equity.