An IVA is known as Individual Voluntary Management. It’s a legal agreement which connects a debtor and creditor. It’s a good way to come out of debt without much legal procedure.
IVA helps a person who has a debt of more than £ 10,000.People with no hope for financial recovery can apply for this plan.The plan doesn’t contain mortgage loan which is taken under your home or any other property.
Pros of Individual voluntary Management
A better way to stay away from bankruptcy and property repossession.
It allows a debtor to make one fixed monthly payment according to debtor’s capacity.
It keeps a debtor away from legal procedure taken by creditors if the debtor makes the regular IVA monthly payments.
The debtor is free from debt’s interest.
Within 5 year a debtor can live a debt free life.
Cons of Individual voluntary Management
Your credit rating will probably be negatively damaged throughout your IVA and, generally, for an additional year right after completion.
If there is money in your property you will most likely need to free up some to pay back debt by remortgaging during the IVA (generally during the last year of the IVA).
Failure of an IVA can result in creditor’s side for your personal bankruptcy.
An IVA is not beneficial to recover from all debts. It doesn’t help you to recover from council tax arrears and court-imposed penalties/fines.
In case you come into any extra money whilst within your IVA, this will be obtained directly into account and you could be anticipated to pay any kind of windfall (but never greater than you owe) into the IVA.
You have to sell any high value or your most lovable assets.
The pros and cons of IVA make you clear about IVA and also help you to take a decision whether to go with IVA is correct or not?