Pros and Cons Of Using IVA Debt Help
Pros and Cons Of Using IVA Debt Help
The financial problems that many people are having at the moment are well documented and it is not necessarily through any fault of their own that they find themselves in this position. For those people who are struggling to keep up with their monthly payments, it is important that they try to resolve the issue as quickly as possible. One way that has become much more common in recent years is to use IVA debt help to make your money problems more manageable. Before you make any decision about what choice you are going to make to start your financial recovery, you should find out a bit more about the possible options. We have highlighted some of the main pros and cons of using an Individual Voluntary Arrangement below.
Positives.
Using one of these arrangements will mean that you will only be paying one single amount each month that will be split between your creditors. This amount will be worked out depending on your own individual circumstances.
When the arrangement has been agreed by your creditors and is fully set up, you should not receive any letters or telephone calls from them. Anything that you do end up receiving can then be handed over to the insolvency practitioner that is dealing with you.
As well as there being no correspondence from creditors, you will also not be subjected to any extra interest fees or charges for making payment late.
Most IVA agreements will last for a maximum of five years and after this time you will be free of all debts. In a lot of cases this will result in a portion of the money owed being completely written off.
Negatives.
You will have to meet certain criteria in order to be eligible for one of these agreements. Usually your total amount owed must be over 12k and you must have at least three different creditors as well.
It is going to have an extremely negative impact on your credit rating meaning that you will not be able to obtain any credit for at least the duration of the agreement and quite possibly for some time after as well.
These arrangements will generally last for five years whereas bankruptcy would be three. Declaring yourself bankrupt would also mean that you pay back a significantly lower amount.
If you are giving serious thought to IVA debt help then it is important that you make sure that you understand as much as you possibly can about it. It is a major decision for anyone to make so it is always recommended to consult an independent financial advisor before taking the plunge.
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