January 2008

IVA - Individual Voluntary Arrangement: Pro's & Con's

As any other debt management solutions, IVA's have positive and negative sides. Don't let the negative aspects put you off talking to specialists about IVA services. They can give you the right advice and explain how to reduce the negative side effects.

Pro's:

You pay only what you can afford
Monthly payments will be fixed and frozen over IVA's legal period
Your creditors will have no legal right to chase you for payments
An IVA will last for a fixed period of time (typically 5 years)
Legal clarity of the situation
Protection from Court Actions
Your status as a professional will not be affected

Con's

Damaged credit rating
If you do not keep up with repayments you might become a bankrupt
No separate private agreements with the creditors are allowed when IVA is in place
You might be obliged to release some of your home equity
Minimum level of debt is required to qualify for IVA (Debt: £12,000+; monthly payments: £180+; Creditors: 2+)