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 about the IVA disadvantages please call our One Advice IVA advisors on 0800 048 1752.
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.
Unsecured debts only. An IVA should only be considered in extreme circumstances as failure to adhere could result in bankruptcy. Debt write off applies only where the IVA is agreed by your creditors and you have completed the, typically, 60 month term.
Once your IVA commences, your monthly contribution is fixed and that is all you have to pay. There are no additional fees on top. Our fees, paid by your creditors, are taken out of your monthly contributions to your IVA and will be notified to you in advance. Some homeowners may be required to remortgage. Terms & Conditions Apply.