The Pro's and Con's
of entering into an Individual Voluntary Arrangement - IVA
What are the
advantages of an Individual Voluntary Arrangement?
• The IVA is legally binding so that the creditors cannot change
their minds once they have agreed.
• Once the IVA is in place the creditors cannot bring any other
actions against you as long as you comply with the terms of the
IVA.
• An IVA can give you
more say over how your assets are dealt with and how payments are
made to creditors. You may be able to persuade your creditors to
allow you to retain certain assets (such as your home).
• A bankruptcy order
can be cancelled if an IVA has been approved.
• You can avoid the
restrictions which apply to a bankrupt.
What are the disadvantages of an Individual Voluntary
Arrangement?
• IVA’s are only suitable if the debtor has the means of making
the creditors a reasonable offer of repayment.
• The duration of the
IVA could be as long as 5 years.
• The costs of the
IVA can be relatively high in relation to cases where the total of
the debts is considered low.
• If an IVA fails
then either the supervisor or the creditors can present a
bankruptcy petition.
IVA’s are not suitable for everyone who finds themselves unable to
repay creditors.
If you find yourself unable to repay your creditors, you should
take action and obtain advice before it is too late.
