An IVA is a debt solution that allows you to avoid bankruptcy while still ensuring you pay back your debts. These plans are based on the principle of affordable monthly repayments, over a fixed period of time. The amount of each payment is determined by taking into account your household income, your normal living expenses, and your priority commitments. Once an IVA begins, it is unlikely that you will be able to change it, so it’s important that you know how much you can afford to pay each month.
An IVA’s repayment term typically lasts five years, although the repayment term can be extended to six years for homeowners with equity in their property. If you miss payments, or your circumstances change, you may be required to pay additional payments. Your IVA adviser will be able to offer you more information on the repayment terms.
An IVA is a debt solution that allows you to stop your creditors from pursuing you for debt. The agreement is set up so that your creditors cannot collect the debt for a set period of time. When the time is up, the remaining debt will be written off and you will no longer have to worry about bankruptcy.
An IVA adviser will examine your finances and help you create a plan that will allow you to repay your debts. You and your adviser will write a proposal to your creditors, detailing how much you can afford to pay each month. If you have surplus income, you can include it in the proposal. Once your creditors agree, you will be able to begin making your payments normally.
An IVA will not be suitable for all types of professionals. Professionals who work for banks, accountants, mortgage brokers, and independent financial advisers may not be able to take part in an IVA. In addition, you should carefully consider the provider that you choose. The process can be complex and you should be very careful.
In the majority of cases, an IVA will not affect your employment, though there are a few exceptions. First, you must make sure that your contract of employment does not contain any clauses that prohibit you from undertaking an IVA. Moreover, your IP may not let you work if you have a bankruptcy.
A major advantage of an IVA is that you will no longer be charged interest on your outstanding debt. Your creditors will not be able to take legal action against you because you are no longer able to pay them. You can keep your house while you complete your IVA. It takes between five and six years to complete.
However, an IVA will negatively affect your credit rating. An IVA will remain on your credit file for six years and will restrict your ability to use new credit. Moreover, your credit rating will likely be damaged if you don’t stick to your repayment plan.