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.

IVA Advantages

  • 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  • An IVA is a legal private agreement between you and your creditors and, unlike bankruptcy, your details will NOT be published in your local newspaper (although they will be available online).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.

IVA Disadvantages:

  • 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.