IVA Advantages & Disadvantages Explained

Before you consider choosing an IVA to help with your debts, it’s always worth evaluating all the advantages & disadvantages of an IVA, some of which are listed below:

Advantages of IVA

A way to avoid bankruptcy proceedings and property repossession.
Make one affordable fixed monthly payment.
Legal action by your creditors is stopped as long as you make your IVA monthly payments.
The interest on your debts is frozen.
You could become debt free in 5 years.


Your credit rating will be adversely affected throughout your IVA and, usually, for an additional year after completion
If there is equity in your property you will usually need to release some to repay debt by remortgaging during the IVA (normally during the final year of the IVA).
Failure of an IVA can result in creditors petitioning for your bankruptcy.
Not all debts can be included in an IVA. Debts such as court-imposed penalties/fines cannot be included.
If you come into any extra money whilst in your IVA, this will be taken into account and you could be expected to pay any windfall (but never more than you owe) into your IVA.
You may have to downgrade or sell any really high value assets (such as exchanging a luxury car for a more reasonable vehicle).

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