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manage debt using an IVA

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IVAs are a good option for people who have a substantial amount of debt that they want to address in a straightforward and effective way. They allow you to get all of your debts compiled in one central location so that you can chip away at them regularly. Not only does an IVA organise your debts, but it freezes the interest you are being charged and results in a major percentage of your debts being written off. Below, we discuss how you can manage your debts using an IVA and how such an arrangement might affect your life.

IVA affects your life.

The question really on most people’s minds is really, how does an IVA affect your life? The truth is that the outcome of an IVA is entirely positive; it allows you to get back to a stable place financially speaking and frees you from the burden of debt. That said, the process does require some effort from you, as you are responsible for managing your IVA and keeping up with payments. Here are some of the ways an IVA can affect your life, divided into pros and cons:

Cons

Impact on your credit score: The IVA will flag up on your credit file and remain there until the IVA is fulfilled. While the IVA is in your credit score, accessing loans and finance will prove difficult.

You are legally bound to the terms of the IVA: You cannot decide to quit the IVA as they are legally binding agreements.

IVAs are not private: Once creditors approve your IVA, details of the IVA will appear on a public database called the Insolvency Register. Few people actually use this system, however, so it’s unlikely that anyone will know about it other than creditors.

Pros

Don’t have to deal directly with creditors: Once your IVA is accepted, your insolvency specialist will act as the middleman between you and those you owe money to.

You pay what you can afford: Because you are assessed to find out what you can pay before an IVA is agreed to, you only pay what you can manage, reducing your monthly outgoings.

Protects your assets: As a viable alternative to bankruptcy, IVAs can prevent you from having to lose any of your assets. They also protect you from bailiffs, so no court order can be granted to repossess your things while you have an active IVA.

No more harassing messages and calls: Save yourself the headache of constant letters and phone calls from creditors and collection agencies.

Consolidates debts: Having all your debts in one place can provide a tremendous relief to people in debt, as you know that everything is in one place and being dealt with.

Writes off debt: A major benefit of IVAs is that they can result in up to 90% of your debts being written off.

Frozen interest rates: Once the IVA begins, the interest accruing on your debts freezes. This makes your debt even more manageable and prevents it from rising.

Is an effective debt solution: The ultimate purpose of an IVA is to get you out of debt, which they do effectively.

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