IVA Disadvantages

An IVA is a legally binding agreement between you and your creditors. Any financial agreement comes with implications, some of which are detailed below.

But if you qualify for an IVA it is often your best way to a debt free future! For more information please call our IVA advisors on 0800 019 5870. 

 

Disadvantages of an IVA:

• An IVA is a complicated legal procedure.
• You must have unsecured debts greater than £15,000.
• At least 75% of your creditors who vote, must agree to the IVA proposal.
• An IVA lasts for 5 years. 
• You must make your monthly payments or your creditors could take further action against you
• If you fail to make the monthly repayments then you are not protected from bankruptcy proceedings.
• You may be asked to re-mortgage your home to release a proportion of your equity.
• You will not be able to take out further credit whilst you are in an IVA without the permission of your Insolvency Practitioner.
• An IVA will affect your credit rating, for up to 6 years, although if you successfully complete your IVA then this will look more favourably on your record.

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)