An Individual Voluntary Arrangement (IVA) is a formal process in the UK that allows you to reach an agreement with your creditors to pay off your debts over an extended period of time. An IVA can be a useful option for individuals who are struggling to repay their debts and are looking for a way to avoid bankruptcy, but it is important to be aware of the potential downsides.
Here are a few potential downsides to an IVA:
- Credit rating: An IVA may have a negative impact on your credit rating, which can make it more difficult to obtain credit in the future.
- Disclosing your financial situation: An IVA involves disclosing your financial situation to your creditors and an insolvency practitioner. This can be a difficult and personal process, and you may feel a sense of shame or embarrassment about your financial situation.
- Potential objections from creditors: Your creditors may object to the terms of the IVA, which can delay the process and make it more difficult to reach an agreement.
- Potential impact on your employment: Some employers may be concerned about your financial situation if you enter into an IVA. While it is illegal for an employer to discriminate against you because of your financial situation, it is still a possibility that your employment may be affected.