Advantages and Disadvantages of an IVA
Advantages
• The monthly
payment is affordable.
• It avoids
bankruptcy.
• You could
retain control, for a longer period, of your assets.
• Interest
payments are frozen.
• Each case
is considered on its merit and does not necessarily require payment
of 100p in the £.
• Debts cleared
in 5 years, usually.
• It is the
debtor’s proposal.
Disdvantages
• No further
borrowing is allowed without the permission of the Insolvency Practitioner.
• Impact on
credit rating although normally this is better than under bankruptcy.
• Default
in IVA could lead to bankruptcy.
• IVA runs
for 5 years compared with bankruptcy for 1 year, although in bankruptcy
contributions could run for 3 years.
