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IVA Pros & Cons (Individual Voluntary Arrangement)
Pros
- Agreement is normally over 60 months (any debt after this period is discarded)
- Based on disposable income
- Consolidation of debts
- No further borrowing
- Do not have to be home owner
- Retain your property if home owner
- Private and confidential agreement (will not be subject to public information)
- Possibility of a third party payment being accepted
- Possibility of an Informal IVA being accepted (minimising your credit history)
- If sole trader the business can still continue to trade with the supervision of the I.P.
- Can still operate a current account.
- An IVA is a Voluntary Arrangement
Cons
- Could curtail further borrowings
- Only suitable to parties with £15,000 debt or more
- Only suitable to people who can make a minimal nominal payment (e.g. £250 - £350 per month)
- For acceptance you need 75% of the voting creditors.
- Possibility that if you are a home owner your property will have to be revalued prior to the completion of your IVA with the creditors receiving part of the equity.
- Should your IVA fail, this could result in a bankruptcy application.
- Any IVA will be supervised by an Insolvency Practitioner
- Formal IVA's will be shown on the credit history register.
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