The main IVA Advantages and Disadvantages are given below. Remember whether an IVA is a suitable debt solution for you will depend on your individual financial circumstances.

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• What are the main IVA Advantages
• A summary of the main Disadvantages

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The main IVA Advantages

1. Single Affordable Payment
An IVA allows you to make a single affordable payment to your creditors each month. The amount you pay is based on your disposable (or surplus) income. As such you will always have enough money to cover your reasonable living expenses

2. Fixed End Date
Generally speaking a monthly payment IVA will last for 5-6 years. After this time as long as you have made all your agreed payments and honoured any other commitments the Arrangement will be completed. The length of an IVA can be reduced by settling early.

3. Debt Written Off
Once you have made your final IVA payment any debt outstanding is written off. After the arrangement you will be debt free other than any secured debts such as your mortgage which you are still required to pay.

4. Interest Frozen
Once your IVA is agreed your creditors are not allowed to add any further interest or late payment charges to your accounts.

5. Legally Binding Agreement
When they have accepted the Arrangement your creditors cannot take further legal action against you to enforce the payment of their debts. They are also prevented from taking action against a property that you own. This means that they cannot try to secure their debt with a charging order.

6. Discreet Procedure
The IVA is a discreet debt solution. Other than your creditors no-one will be told about the Arrangement. However, it is important to be aware that your name will be added to the insolvency register which is publicly accessible via the internet.

7. Suitable for Limited Company Directors
If you are a director of a limited company you can use an IVA to resolve your personal debt problem without having to resign your post. This is a significant advantage over bankruptcy where company directors must resign.

The main IVA Disadvantages

1. Credit Rating Effected
The IVA will be recorded on your credit file for 6 years. This will significantly affect your Credit Rating. Wile you are in an IVA and possible for some time afterwards you will find it difficult to take on new credit agreements or get a mortgage.

2. Home Equity May have to be released
If you are a home owner you may have to try and release equity from your property to increase the overall amount that you pay back to your creditors.

3. Strict living expenses budget
While you are in your IVA you will need to live within a strict living expenses budget. Any extra money you have over the total of your agreed expenses will have to be paid into the Arrangement.

4. Your Monthly Payments may Increase
Your IVA payments are not necessarily fixed. If your financial circumstances improve you might have to start paying more. This situation will not reduce the length of time that the Arrangement lasts. It simply means that your creditors will receive back more of the debt they are owed.

5. Non Payment could risk the Failure of your IVA
If you do not to adhere to the terms of your IVA then it might fail. If this happens you could be left in a position where your original debt has not reduced. You will then have to implement a new solution for dealing with your debt. In certain (albeit rare) circumstances you could be forced to go Bankrupt.

6. Your creditors must accept your IVA proposal
The lenders you include in your IVA are not obliged to accept your proposal. The agreement will only be accepted if 75% in value of those creditors who vote on the proposal agree to it. If your IVA is not agreed you will remain liable for the payment of your debts.