Whether an Individual Voluntary Arrangement (IVA) is worth it will depend on your specific circumstances and financial goals. An IVA is a legally binding agreement between an individual and their creditors that allows the individual to repay their debts over an extended period of time. It is typically used when an individual is experiencing financial difficulties but is not yet insolvent.
There are a number of potential benefits to entering into an IVA, including:
- It allows you to repay your debts in a structured and manageable way, which may be more affordable than making full monthly payments to all of your creditors.
- It can provide protection from legal action by your creditors, as the terms of the IVA are legally binding.
- It can help to improve your credit rating in the long term, as completing the IVA shows that you have taken steps to address your financial difficulties.
However, it is important to note that there are also potential drawbacks to entering into an IVA, including:
- It may require you to make significant monthly payments, which could be unaffordable for some people.
- It may have an impact on your credit rating in the short term, as the IVA will be recorded on your credit file.
- It may involve you having to sell certain assets, such as your home or your car, in order to repay your debts.
It is generally advisable to seek professional advice before entering into an IVA, in order to determine whether it is the right option for you and to understand the potential implications.