What Is An IVA Debt | Get Detailed Information About IVA

Debt might pose a major to minor impact on a person’s life positively or negatively, depending on how it is actually handled. For instance, some debt, if handled in the correct manner, might build your credit report as well as support you achieve your dreams, like getting on the property ladder. But, if due to any uncertain situation, debts get out of hand, then they can take a toll not only on the finances but also on the physical well-being. 

Well, in such situations, an IVA may be just what you truly require to regain financial control. 

What Is An IVA?

The IVA refers to the Individual VoluntaryArrangement. This is a formal, legally binding settlement procedure that freezes interest as well as charges on the unsecured debts, enabling you to pay your lenders a pocket-friendly amount over a granted period of time. And upon successful completion, any kind of outstanding unsecured debt would be written off. The IVA can protect you from lenders and bankers initiating legal action, like petitioning for your Bankruptcy or making an appeal to Court for defaulting on the monthly payments. 

A Brief Overview Of An IVA Pros & Cons

The pros & cons of IVA completely depend on your personal events, but, here’s an overview of the pros & cons we will cover today! 

Pros: 

A budget-friendly payment option

Helps to protect your assets as well as property

Lenders should not harass you anymore for payment

The payment is fixed as well as reliable

Charges & interest rates are frozen

It’s completely legally binding

Security from bailiffs & other relevant legal action 

Cons: 

Pose major to minor impact on the employment

Affects the credit report as well as credit score

It is not private

It implies following a stringent budget

If you are a homeowner, then you might require to release equity from your house 

These are the major PROs & CONs! In fact, if you would like more details regarding the IVA pros & cons, then you can check out the rest of the blog. Our blog will help to let you know each and every aspect of IVA debt! 

IVA Pros & Cons: 

Major Pros of an IVA

There are a number of benefits to an IVA. So, today, we have outlined the main details of these benefits so that you can find whether an IVA could support you: 

You only spend what you can actually afford 

Your day-to-day living expenses will be considered before the payment to the IVA. Therefore, you can only spend what you can actually afford! 

It protects your assets as well as property 

Assets & property such as your vehicles or homes are generally protected during the IVA agreement, which implies you will be able to retain these, provided they’re of a reasonable price. 

Can’t bother you anymore for monthly payment 

Once lenders or bankers have agreed to the IVA proposal, legally they’re bound by the settlement plan & can no longer get in touch with you directly to ask you about the payment. But, you’ll have to deal with the Insolvency Practitioner as well as their staff who will manage the whole IVA & will deal with lenders on behalf of you. 

A fixed & reliable payment option 

You’ll make a budget-friendly repayment opportunity to your debts in the knowledge that your debt amount is completely fixed. Lenders can’t make any kinds of extra charges or add more interest to the debts when the IVA is approved. 

It writes off debt

Generally, the IVAs last 5 to 6 years. And when the agreement gets successfully completed, all the remaining unsecured debt will be written off. 

Interest & other charges are frozen 

When the IVA gets approved by lenders interest as well as charges are frozen & can’t be added to the debts by the lenders. It helps to prevent the debt from enhancing further. 

An authentically binding solution 

As we all are aware of the fact that IVA is legally binding, which means when approved, both you as well as your lender need to follow the agreed terms and conditions. 

Securance from bailiffs and other legal action 

As long as you adhere to all the terms & conditions of your IVA, lenders aren’t enabled to take any sort of legal action against you. It also includes sending bailiffs in order to reclaim the debt. 

Decreased social stigma 

Although the issue of debt shouldn’t be taboo usually, this might be another better alternative, such as bankruptcy. 

Better employment opportunities 

Although most of the occupations won’t permit employees to join them if those have been made bankrupt, the same can’t be said of an IVA. Therefore, we would always suggest verifying your employment contract if you were worried that there might be some impact on your job 

Cons of the IVA

But, as with any other type of financial product, there are certain negatives to IVAs: 

Your credit score, as well as rating, will be affected 

The IVA will negatively influence your credit score as well as a rating. The IVA will be shown on your credit report & also will usually remain there for at least 5 to 6 years from the time of approval. As the IVA generally lasts for 5 to years, it means that is it possible to show on the credit report for a further year after successfully finishing the IVA. And resulting, you will possibly find it pretty difficult as well as challenging to obtain future credits or other financial products. 

IVA isn’t a private option 

When an IVA gets approved by the lenders or bankers, it is shown on a public database that is named as Insolvency Register. And the I solvency Register can be searchable by anyone. Although, in general, the least amount of people are basically going to use this system. 

You’ll require to maintain a strict budget plan 

Monthly payments to the IVA require to be made. Although the settlement plan is somewhat reliable as well as flexible, you’ll be required to budget for the next 5 to 6 years to assure that you continue making all the repayments. 

If you are a homeowner, you might require to release equity from your house 

You might be asked to release equity from your house as part of the settlement plan. If it is not possible at all, the length of your IVA may enhance from 5 to 6 years. But, an IVA might still be a good option for you if you owe money to more than one lender or have accumulated at least 2 debts. 

Well, if the amount of your debt is more than 6,000 pounds or you don’t want to contact your lender directly, the IVA can always be the most suitable as a good option for you!  Get in touch with us today with any sorts of concerns or queries you have in your mind right now, & we would be pleased to answer them for you.  

On the other hand, you can always give us a ring on our customer care number or send us mail at our official mail ID! So, without any kind of hesitation, you can research us at your convenience!