The Benefits of an IVA

Debt can be so daunting when it piles up, adding so much extra stress into your life. If you live in the UK consider an IVA, and Individual Voluntary Arrangement, which can be a great solution for those struggling with debt. Haven't heard of an IVA, or don't know enough about them? Read on.

An Individual Voluntary Arrangement, or IVA, is a debt solution that can help you if you're struggling to repay your debts. You'll make an agreement with your creditors to pay back what you owe over a period of time, usually 5 years. Once the IVA is completed, you'll be debt-free.

An IVA is only available to people who live in England, Wales or Northern Ireland. The Scottish equivalent is a Protected Trust Deed.

There are many advantages of an IVA that make it an attractive debt solution for those who are struggling to repay their debts. Let's take a look at some of the top advantages of an IVA.

Firsty, IVAs give people who are struggling with debt a way to repay what they owe over a period of time, based on their affordability, so you will only ever repay what you can afford. This means that people who enter into an IVA can avoid bankruptcy and become debt-free within a set period of time, usually five years.

Making multiple payments each month to different creditors can be overwhelming, and it can be difficult to keep track of everything. An IVA, or individual voluntary arrangement, is a debt solution that can help. With an IVA, you make one payment per month, which is then distributed to your creditors. This can make it easier to budget and keep up with your payments.

Another key benefit of an IVA is creditors can no longer contact you and can no longer demand payment. This is because an IVA is a formal agreement between you and your creditors to pay off your debts over a period of time, usually five years. During this time, they are not allowed to contact you or take any further action against you. After the five years are up, any remaining debt is written off, which means you will be debt free.

Also, once you have an IVA, your monthly payments are usually lower and you have longer to pay off your debts. Interest and charges on your unsecured debt will be frozen, which means that your debt will not increase while you are in the IVA. This can make it easier for you to repay your debt and become debt free.

This means that if you have an IVA in place and you fail to make payments, your creditors cannot send bailiffs to collect on the debt. IVAs are designed to provide legal protection and peace of mind to those struggling with debt and prohibiting bailiffs from collecting debt is just one way which it does this.

Lastly, IVAs are usually proposed for a set time period, which is typically five or six years. This means that there is an end in sight to your IVA term and you know when you will be debt free. If you make all of your monthly IVA payments on time, you will be debt free at the end of the term. However, if you miss any payments, the IVA may be extended and you will have to continue making payments for longer than the originally proposed term. Either way, an IVA can provide some much-needed breathing room when it comes to repaying your debts.

Individuals must keep in mind that there are also some disadvantages that individuals should be aware of before entering into an IVA. One disadvantage is that IVAs can also have a negative impact on an individual's credit rating, which may make it difficult to obtain credit in the future. IVAs can also be costly, as there are set-up fees and ongoing charges that must be paid. As with any debt relief solution, individuals should carefully consider all of the pros and cons of IVAs before entering into one.

There are many benefits of an IVA that make it an attractive debt solution for those who are struggling to repay their debts. If you're considering an IVA, be sure to speak to a qualified debt advisor to see if it's the right solution for you.