Pros & Cons of an IVA

If you are considering getting a Individual Voluntary Agreement, you'll need to find out if this is your best possible option. As with all options for debt management, an Individual Voluntary Agreement has advantages and disadvantages that anyone should consider before starting the process of acquiring an IVA.

Advantages of an IVA

You can be free of debt five years after putting the IVA in place. An IVA is usually set for a specific period of time, and it generally lasts no longer than five years.
Any demands for payments will be stopped once the IVA is agreed on. Creditors are, by law, required to stop demanding payments either through mail or telephone.
All late payment charges and interest charges are frozen. Creditors are no longer allowed to charge your account with additional interest charges or any other charges once the IVA is agreed on – this is specified by law.
You will only be required to make monthly payments depending on what you can afford. The amount is usually set at the beginning of the IVA process; there are certain cases, however, that you may be required to pay a lump sum.
Your credit rating will be restored once the IVA is successfully completed. You will be allowed to borrow money if the need arises and will no longer be blacklisted among creditors.
An IVA is a fixed and legally binding agreement. Once it has been agreed upon by all creditors, you will know your exact standing with your creditors and you will also know when you can be free of all debt.
You will gain protection from any legal action once the IVA has been agreed on. Creditors will not be allowed to take any legal action against you provided you maintain the terms of the agreement.
Your professional status will remain unaffected as long as you meet the requirements set on the IVA.

If you undertake an IVA, you may have to release a part or your entire home equity as part of the agreement.
Only individuals who have unsecured debt totaling to a minimum of £15,000 qualify for an IVA; and most monthly payments can start at about £200.
You will not be allowed to borrow or incur unsecured debt while the IVA is still in effect.
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