Once your IVA has been accepted, you could benefit from:
Repayments to creditors are based on what you can afford – not how much you owe.
Once you have made the agreed contributions any remaining money owed is written off.
A sense of control
An IVA allows you to regain control of your debts and work towards debt freedom
Debts cannot increase further
Frozen interest and charges so that your debts do not increase.
Creditors cannot pursue you for their debt or take legal action.
Knowing when you’ll be debt-free
A fixed agreement usually lasting five years, after which any remaining unsecured debts will be written off.
Home is protected
An IVA can help safeguard your property and ensure future affordability even after the IVA.
You’ll be less stressed knowing IVA will stop contact from your creditors and your payment are affordable
Avoidance of bankruptcy
An IVA enables you to continue to trade if you are self-employed or have a trading business.
Better able to afford other financial commitments
An IVA can catch unknown debts such as unpaid tax or overpaid tax credits.
As with any insolvency process, there are consequences of entering into an IVA. These include:
IVA can fail
If you don’t stick to the agreed terms of your arrangement and you don’t speak to your Insolvency Practitioner or their team your arrangement may fail.
Risk of Bankruptcy
If your arrangement fails your creditors could again take action against you and interest may resume on your debts.
Restrictions on expenditure
There are industry guidelines for your expenditure we have to adhere to – but you won’t be expected to live in poverty.
Assets are a factor
If you have assets then you may be asked to make these available to your IVA, e.g. savings plans.
If you are a homeowner, you may be asked to re-mortgage your property in the 5th year of your IVA, to release any equity to creditors. There are many situations where a re-mortgage is not required which we can explain to you, and if a re-mortgage is not available an IVA can be extended for 12 months which is generally what happens in most cases.
An IVA will appear on your credit file for up to 6 years from the date it commences. During this time it may be difficult for you to obtain credit.
No guarantee of acceptance
Creditors can reject an IVA, but there are usually specific reasons for this, and we can negotiate with creditors or even re-propose the IVA if required. We do not put forward IVA without a high expectation of approval.
An IVA will be recorded and entered onto a public register, but someone would need to be specifically looking for you on it to find you.