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Apply For An IVA

IVA Pros and Cons – What You Should Know

Can’t decide whether an IVA (Individual Voluntary Arrangement) is right for you? Take a look at our article below to help you make an informed decision.

There are some IVA Pros and Cons that you should know. Firstly, you need to know that you will be paying back your debt at a rate you can afford, and the rest will be written off at the end of the arrangement. You may even have up to 70% of your debt written off at the end of your IVA. The repayments will be calculated based on your monthly income, and your living expenses will not be affected.

IVAs are flexible debt solutions

An IVA is a type of flexible debt solution. You make one regular payment to the IVA provider, and they will issue dividends to your creditors. The amount of the payment is calculated based on your affordability. You may also have surplus income to contribute to the debt arrangement. However, if your financial circumstances improve, you may not be eligible for an IVA. In this case, you must have a qualifying debt.

Although IVAs are flexible debt solutions, they come with certain terms and conditions to protect your creditors. For example, creditors want to see that you repay as much of your debt as you possibly can. Therefore, you will have to submit a monthly budget and be willing to pay at least half of your extra income each month. The repayment amount depends on your needs and budget, so you should speak to a debt adviser to find out if IVAs are suitable for you.

They reduce interest

The IVA process is a court-backed scheme that helps consumers to restructure their debts. Aside from reducing interest rates, this scheme can also help to improve a consumer’s credit rating. The first step in getting a new loan is examining your credit rating. Your mortgage broker will be able to assist you in choosing a suitable lender. As an IVA is a regulated process, your age is not an issue.

They allow you to keep control of your finances

IVAs allow you to keep control of some aspects of your finances, while avoiding the risk of bankruptcy. In many cases, you can even keep your current employment. However, there are some drawbacks to an IVA, and you should consider all the implications before you sign up for one. Here are some of the key ones. IVAs require you to open a basic bank account. This account should be separate from your other debts, and should not offer credit facilities or an overdraft.

An IVA is an agreement between you and your creditor, usually a finance provider or a lender. It works by looking at the total amount owed and your income, and deciding on a payment plan. Your repayments may range from giving a portion of your salary each month to paying off the entire debt in one lump sum. An IVA allows you to keep control of your finances while maintaining some of the rights you had in the past.

They have a windfall clause

When people opt for an IVA, it is important to understand how the windfall clause works. In a nutshell, a windfall is any amount that comes your way after the completion of your IVA agreement. It may be cash, property, or a combination of both that you receive. In some cases, you may be allowed to keep some of this windfall if you have a valid mitigating circumstance. If you are receiving a windfall, be sure to let your Insolvency Practitioner know.

One major agreement term in an IVA is the windfall clause. A windfall clause means that any unexpected money that comes your way must be paid to your creditors. A windfall can be anything from lottery winnings to insurance payouts or inheritance money. The key is to disclose all of your windfall income to your IVA practitioner. In some cases, you can get a portion of these payments, but it is up to your insolvency practitioner.

They are expensive

An IVA can be extremely costly, especially if you have a high amount of debt. IVAs are usually only appropriate for people with low levels of debt. It can take five years to repay the debts included in the IVA, and your credit rating will be affected for at least 6 years. Unlike bankruptcy, an IVA will not allow you to take out credit during that time. However, you can opt to use a debt management plan to make your payments more manageable.

A typical IVA can cost PS4,000 or more. Most IPs have set-up and supervision fees that are deducted from your monthly payments to your creditors. It is worth checking these costs before signing any agreements with a particular IP. These fees can add up quickly and can be quite high. To make matters worse, some IVA providers charge set-up fees. Make sure you shop around for the best deal and ensure you get the best service possible.

They can have repercussions for your job

If you are worried about IVAs having repercussions on your career, you need to speak with your HR department to find out the best way to proceed. While many jobs do not have strict rules about the consequences of filing for an IVA, there are some that do. The pros of an IVA include tax benefits and reduced stress levels. However, the cons outweigh these benefits, and you should always consider your job prospects before opting for an IVA.

One of the downsides of an IVA is that your credit rating will drop drastically, and this may impact your ability to get credit from a bank or lender. You may find it difficult to get new mortgages or rent a house after an IVA. While it is true that you will not lose your job because of your IVA, companies will be able to check your Insolvency Register entry before trading with you.