An Individual Voluntary Arrangement (IVA) can be a good option for individuals who are struggling to repay their debts and are looking for a way to avoid bankruptcy. An IVA is a legally binding agreement that allows you to reach an agreement with your creditors to pay off your debts over an extended period of time, typically five years. At the end of the IVA period, any remaining unsecured debts (e.g., credit card debt, personal loans) are written off.
There are several potential benefits to an IVA:
- Avoiding bankruptcy: An IVA allows you to avoid bankruptcy, which can have serious consequences for your financial situation and your credit rating.
- Lower monthly payments: An IVA can help you to reduce your monthly debt payments, making it easier to manage your debts.
- Creditors are legally bound to the agreement: Once an IVA has been approved, your creditors are legally bound to the terms of the agreement and cannot take further action to collect the debt.
However, it is important to be aware of the potential downsides to an IVA, including the negative impact on your credit rating, the need to disclose your financial situation to your creditors and an insolvency practitioner, and the potential for objections from creditors.
If you are considering an IVA and are not sure if it is the right option for you, it is a good idea to speak with a financial professional or an attorney for advice. They can review your specific situation and help you determine the best course of action.