Disadvantages of An IVA

 

IVAs are an expensive way to deal with problem debts. Beyond the insolvency practitioner’s fees, which can be very high, in order to complete your IVA you must make regular monthly payments for around five years. If your circumstances are likely to change or you don’t have a predictable source of income an IVA is probably not right for you.

You may have to sell more expensive assets (like cars, valuable jewellery, or any property that isn’t your family home), and in some cases you may have to remortgage your home at the end of your IVA.

Some other disadvantages of an IVA are that you will find it more difficult to get credit if you’ve had an IVA, which can affect things like catalogue shopping and obtaining a mortgage, as well as the more obvious things like getting a personal loan or credit card.

Certain professions are also not allowed to practice if they have gone through an insolvency procedure, which includes IVAs. Common professions covered by these restrictions are accountancy and legal services, but you should check your contract of employment and with any professional bodies to find out if you may be affected.

IVAs can be refused, Your creditors can refuse your IVA proposal but in most cases, we can negotiate with your creditors to get your IVA approved

❌  An IVA is a formal agreement, Therefore you need to make sure you comply with the terms and conditions attached to an IVA

❌  Your monthly repayments may leave you with a tight budget whilst your debts are repaid

It will affect your credit score. IVAs remain on your credit file for 6 years from the day it starts, Some IVAs can last longer, therefore, this will show on your credit file for longer

Not all debts can be included in an IVA, or example student loans, child support and maintenance, magistrate court fines and social fund loans are excluded from an IVA, but an allowance can be given to enable you to continue repaying these.

If you fail to make the payments due under the terms of your IVA, then your arrangement could fail.

Your IVA will be listed on the Individual Insolvency Service register

If you fail to make the payments due under the terms of your IVA, then your arrangement could fail.

Do You Qualify?

Roughly how much unsecured debts do you currently have?

Less Than £6,000
£6,000 - £10,000
£10,000 - £20,000
More Than £20,000

What is your current employment status?

Full-time employment
Part-time employment
Looking for work
Unemployment
Benefits

What country do you live in?

England
Scotland
Wales
Northern Ireland

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** In most cases up to 90% of the debt can be written off with an IVA. The amount written off will depend on your circumstances, levels between 30% and 90% are realistic.

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