Should I Get An IVA?
The credit crunch brought a significant rise in the number of personal insolvencies in the United Kingdom. Many citizens have had to file for bankruptcy and some have decided that an IVA is a better choice for them. If you are facing insolvency, it is good to be aware of the options that are available to you so that you make the best decision you can.
The first thing you should do if you’re thinking about an IVA is weigh out the pros and cons of this particular debt solution. Is it a good fit? Will this help in the long run? These are questions you should be asking. If you have significant debt than you might not have as many options so try to deal with the problem before it gets too bad. You also don’t want to jump into a solution that isn’t a good fit for you.
There are many different advantages and disadvantages to each debt solution. The first of the pros for an IVA is that your information is not shared with anyone so it’s a relatively discreet matter. Another great part about them is that you will be 100% free of debt at the end of the term.
With a bankruptcy you could lose your home so a lot of people think IVAs are better in that regard. If you pay the monthly premiums of your IVA then your home will stay safe and so will you. Another advantage is that you can keep a bank account and withdraw money as normal. You’ll likely not be able to take out any loans but it’s probably best that you didn’t anyway.
One of the greatest pros to an IVA is that 75% of your total debt will be written off after the IVA is completed. This means that within 5 years (give or take) you will be totally debt free. The other great thing about the contract between you and your creditor is that they can’t contact you under any circumstance. Many people find this to be very nice because they know that collection agents will finally leave them alone.
IVAs were introduced by the UK government and they are legally binding so your creditors cannot come after you once you start the IVA. The only instance where they will be allowed to take legal action against you is if you stop paying your monthly premiums. If you are a director of a company based in the UK then you can keep your position and the company can continue to trade.
There are also some disadvantages when it comes to getting an IVA. They aren’t perfect debt solutions because there aren’t any perfect debt solutions. One of the main ones is length of time: an IVA can last as long as 5 years but a bankruptcy is only one. The other thing is that an IVA is listed in the insolvency register so there is a chance that this information could get out.
The IVA process will keep you on a pretty strict budget but you can pay off your IVA faster if you acquire a lump sum of money during the 5 year term. This is one of many reasons why an IVA might work for you.
Check outIVA.net today to find the best advice on debt in the UK.
