Pros & Cons Of An IVA
During the credit crunch, there was a rise in the percentage of UK residents that were facing insolvency. Many people chose to go with a bankruptcy and others used IVAs or debt management to deal with their large debt problems. If you happen to be a person in serious debt, make sure you weigh out all the options that are before you. If you don\’t know the options you can\’t make an informed decision.
Before deciding whether an Individual Voluntary Arrangement is right for you it\’s good to do a lot of research and to really understand the pros and cons of this relatively new debt solution. If you\’re thinking about an IVA you should gauge the pros and cons based on your particular situation. If you have serious debt problems there might not be a lot of options but make sure you know them before you jump in.
When we talk about the advantages of an IVA the list is quite long but there are also some definite disadvantages as well. One of the first advantages is that it will keep your debt problem a secret and the fact that you have an IVA will not be shared with others. The other great part of getting one of these solutions is that you will be debt free at the end of it.
With a bankruptcy you could lose your home so a lot of people think IVAs are better in that regard. If you pay the monthly premiums of your IVA then your home will stay safe and so will you. Another advantage is that you can keep a bank account and withdraw money as normal. You\’ll likely not be able to take out any loans but it\’s probably best that you didn\’t anyway.
One of the greatest pros to an IVA is that 75% of your total debt will be written off after the IVA is completed. This means that within 5 years (give or take) you will be totally debt free. The other great thing about the contract between you and your creditor is that they can\’t contact you under any circumstance. Many people find this to be very nice because they know that collection agents will finally leave them alone.
IVAs are legally binding arrangements, which means your creditors have no grounds to make claims against you. They must back off. This is especially important for business owners who are able to continue trading with their companies. Some people run very successful businesses but there personal finances are in shambles so this might be an ideal option for people like that.
There are some disadvantages to IVAs as well. Some companies that offer IVAs sell them as being perfect but that is not the case. First of all, an IVA will take 5 years to complete in most cases. A bankruptcy is only a year. IVAs are also registered with a insolvency list which could potentially be made available to the general public.
The IVA process will keep you on a pretty strict budget but you can pay off your IVA faster if you acquire a lump sum of money during the 5 year term. This is one of many reasons why an IVA might work for you.
Check outIVA.net today to find the best advice on debt in the UK.