IVA Advantages

  • Once your IVA has been accepted, all further interest and charges are frozen
  • Your creditors will write off the remaining balance outstanding upon completion.
  • Once your IVA is completed you will be debt free (excluding any secured creditors or unsecured debts not included in the IVA.)
  • You will normally be able to stay in your home (you may have to agree to release equity in your home to improve the dividend to creditors however this would be fully explained to you prior to acceptance).
  • The IVA won't jeopardise any reasonable assets you have. For example if you own a reasonable car and use this to travel to work.
  • You are legally protected by the IVA terms. Once accepted your creditors cannot take further action providing you stick to the agreement.
  • If your circumstances change a new proposal (typically called a variation) can be put to your creditors to take the changes into account. For example a reduction in income or unemployment.
  • Your IVA will not be published in a local or National paper. Your friends and family need not find out.
  • Business owners can continue to trade with an IVA.
  • There will be no requirement to declare that you have been bankrupt on any future loan applications.

IVA Disadvantages

  • Agreeing to an IVA means that you are committing yourself to a 5 year payment plan
  • If you own your home, then you may have to release any equity in it for the benefit of your creditors
  • You could be made bankrupt if you fail to maintain your IVA payments without a valid reason
  • For the duration of your IVA you won't be able to take out any further unsecured credit without the consent of your Insolvency Practitioner.
  • There are costs involved in the establishment and running of an IVA. Click here for a breakdown of all costs.
  • Your IVA will adversely affect your credit rating for up to 6 years.
  • The IVA period is longer than bankruptcy.
  • An IVA can last up to 5 years, whereas in bankruptcy a payments order can be made for up to 3 years.
  • IVAs appear on the Insolvency register.