Individual Voluntary Arrangement (IVA) are full of advantages for the debtor.
However, an Individual Voluntary Arrangement (IVA) does have its Cons or disadvantages.
When people are looking for an Individual Voluntary Arrangement (IVA), they can be forgiven for only focusing on the Pros or advantages they will experience when the Individual Voluntary Arrangement (IVA) begins.
But it is equally important that the Cons or disadvantages are also studied, for the devil is sometimes in the detail !
So what are the Individual Voluntary Arrangement (IVA) Cons. The main Cons are quite easy to list:
- The Individual Voluntary Arrangement (IVA) Cons or Disadvantages.
- An Individual Voluntary Arrangement (IVA) is a Formal Agreement. Because the Individual Voluntary Arrangement (IVA) is a formal agreement, the debtor will be bound by its terms, and if the debtor is unable to comply, the Individual Voluntary Arrangement (IVA) will be failed. This could lead to the creditors making the debtor bankrupt.
- Individual Voluntary Arrangement (IVA) have Annual Reviews. Some people would not like the idea of having to submit their financial statements for an annual review each year. An Individual Voluntary Arrangement (IVA) obliges the debtor to provide these details without fail.
- Individual Voluntary Arrangements (IVAs) have Rigid Payment Terms. An Individual Voluntary Arrangement (IVA) is quite rigid in what it expects the debtor to pay into their Individual Voluntary Arrangement (IVA), and although there can be some flexibility in extreme circumstances, generally the Individual Voluntary Arrangement (IVA) payment terms are quite rigid.
- No Credit Whilst in an Individual Voluntary Arrangement (IVA). Once the Individual Voluntary Arrangement (IVA) begins, the debtor is not allowed to take out any credit agreements. It is considered a serious breach of the Individual Voluntary Arrangement (IVA) if they do, and the Individual Voluntary Arrangement (IVA) could be failed by the insolvency practitioner
- Your Credit Rating. The Individual Voluntary Arrangement (IVA) will be noted on the credit file of the debtor, and will stay there until the Individual Voluntary Arrangement (IVA) is completed. Only when the Individual Voluntary Arrangement (IVA) is completed will the debtor be able to improve their credit rating score.
Beyond these few standard Cons or disadvantages, there are potentially other issues that may stop you from taking the Individual Voluntary Arrangement (IVA) route out of debt, but these Cons will be specific to your personal circumstances. If you would like to discuss any issues you have regarding whether the Individual Voluntary Arrangement (IVA) route is best for you, just call our free help-line on 0800 088 7503.
On the flip-side, why not take this link if you would like to read about the Pros, or advantages of an Individual Voluntary Arrangement (IVA).
For plenty of other useful information, be it Pros or Cons on Individual Voluntary Arrangements (IVAs) take this link.
If you would like to talk to one of our specialist advisers, just call My IVA Adviser for free on 0800 088 7503.
Or take this link for a full explanation of the IVA process.
We are here to help you find the best solution for you.