There are a few potential disadvantages to consider when deciding whether an Individual Voluntary Arrangement (IVA) is the right option for you. 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. Here are a few potential disadvantages to consider:
- Negative impact on credit rating: An IVA can have a negative impact on your credit rating, which can make it more difficult to obtain credit in the future.
- Required payments: An IVA requires you to make regular payments towards your debts, which may be unaffordable for some people.
- Fees: An IVA may involve fees for the insolvency practitioner and other professionals involved in the process, which can add to the overall cost.
- Creditor objections: Your creditors may object to the terms of the IVA, which can result in the IVA being rejected.
- Non-compliance: If you fail to make the required payments or do not adhere to the terms of the IVA, it may be terminated.
It is a good idea to carefully consider the potential disadvantages of an IVA before deciding whether it is the right option for you. It is also a good idea to speak with a financial professional or an attorney for advice if you are considering an IVA and want to get a sense of the potential drawbacks. They can review your specific situation and help you determine the best course of action.