IVA Positives

• No publicity in the local papers therefore no stigma attached
• You are able to operate a 'normal' bank account however without the privilege of an overdraft facility
• It may safeguard your property
• It does not affect your ability to hold or continue in public office
• Once the IVA is in place your creditors cannot bring any other action against you as long as you maintain your agreed monthly payment
• You only have to make one monthly payment or in some cases, a one-off lump sum
• Your creditors recognize that they must accept less than all the money owed.
• You do not suffer the same restriction if you were to be made bankrupt. So as a company director or a member of the armed forces, you may continue.
• You may only pay back a percentage of your debts.
• You can continue to trade in a business to generate income
• Administration costs for the whole procedure are normally lower than bankruptcy, therefore enabling higher payments to your creditors.
• The Arrangement is legally binding so that your creditors cannot change their minds once they have agreed.
• You Have Protection from Court Actions.

Disadvantages of an IVA

• Usually this Programme is only suitable if the debtor has unsecured debts of at least £15,000.
• To gain approval, a required (75%) of the value of those creditors who have voted must agree to accept the proposed arrangement.
• The home and assets of the debtor can be at risk if the creditors decide not to exclude these factors.
• Should the arrangement fail, the debtor can still be made bankrupt.
• All IVA’s are recorded in the DTI register and could appear on the debtors credit file. This could effect any future applications for credit.
• IVA’s are only suitable to you if you can afford to make an offer of repayment to your creditors.
• Your creditors have to agree on the arrangement through a vote.
• IVA’s are generally expected to be for a period longer than that of a bankruptcy procedure, i.e. 5 years of an IVA as opposed to 3 years (if payments are to be made from income).
• The home and assets of the client can still be at risk if they are not excluded from the proposal should the client fail to comply with the terms of the arrangement.