An IVA: Is It Right For Me?
The recession in the United Kingdom took its toll on the country. Personal debt has risen and insolvencies are very common throughout the country. Many citizens have had to take on a lot of debt or were forced to file bankruptcies or IVAs. If you’re in a similar situation make sure that you understand all the options before you choose one. This decision will live with you for a while.
The first thing you should do if you’re thinking about an IVA is weigh out the pros and cons of this particular debt solution. Is it a good fit? Will this help in the long run? These are questions you should be asking. If you have significant debt than you might not have as many options so try to deal with the problem before it gets too bad. You also don’t want to jump into a solution that isn’t a good fit for you.
There are many different advantages and disadvantages to each debt solution. The first of the pros for an IVA is that your information is not shared with anyone so it’s a relatively discreet matter. Another great part about them is that you will be 100% free of debt at the end of the term.
With a bankruptcy you could lose your home so a lot of people think IVAs are better in that regard. If you pay the monthly premiums of your IVA then your home will stay safe and so will you. Another advantage is that you can keep a bank account and withdraw money as normal. You’ll likely not be able to take out any loans but it’s probably best that you didn’t anyway.
Most IVAs will allow you to write off a significant portion of the amount that you owe to the creditors. Sometimes it can be as high as 75%. What does this mean? It means that within 5 years you will become debt free and have paid back only a portion of the amount owed. It sounds like a pretty good deal but we will talk about some of the disadvantages later in the article.
IVAs were introduced by the UK government and they are legally binding so your creditors cannot come after you once you start the IVA. The only instance where they will be allowed to take legal action against you is if you stop paying your monthly premiums. If you are a director of a company based in the UK then you can keep your position and the company can continue to trade.
There are also some disadvantages when it comes to getting an IVA. They aren’t perfect debt solutions because there aren’t any perfect debt solutions. One of the main ones is length of time: an IVA can last as long as 5 years but a bankruptcy is only one. The other thing is that an IVA is listed in the insolvency register so there is a chance that this information could get out.
An IVA is closely monitored by an insolvency practitioner and one of the things they do is review your wage slips and salary updates. You cannot pay less than you earn into your IVA so this makes things difficult but an IVA is great for many other reasons.
Check outIVA.net today to find the best advice on debt in the UK.
Related posts: