Taking an IVA will prove to be a good opportunity for somebody who is at the boundary of bankruptcy. But IVA comes with its own limitations. Taking an IVA can make you free from your economic problems for a limited period of time, but eventually it can put your future in danger.
IVA is an authorized contract between the creditor and the debtor. An individual, as a defaulter, will be limited by law to ensure that he/she forfeits the predetermined amount of money in parts from their wages. If they are not competent to pay their dues in a certain period of time, the contract will be suspended by itself. After that, one will not only lose the money that they have already paid but it will also bankrupt them. Moreover, the IVA sum will be added into the whole amount of debt as well. And subsequently, one will never come out of their monetary disaster.
IVAs are at least made for 5 years. By being stuck with the rigid payment schedule, you cannot undertake another business or a better job, due to the risk factors that are involved. Most IVAs are reviewed annually, and you are supposed to comply with it. Even a small raise in the instalments can make a huge difference to your already constraint resources. If you work overtime, or start earning more, you shall be obliged by a clause in the IVA to contribute half of your additional income to the IVA payments.
During the period of IVA agreement, you will not be permitted to apply for any sort of loan like, credit card loans, house loans and business loans etc. Even if you do that, it will be taken as a serious violation of law, and may result in a legal action against you by your creditors, as they have signed your IVA. This is one of the major disadvantages of having an IVA as you would not be allowed to make any judgment regarding your future.
Until the time when you disburse all the funds as mentioned in your IVA, your score for credit rating will be inactive. And, somehow if you arrange to disburse all the dues, you will never be convinced that you get a constructive response from your future credit cards applications. The file for your credit will retain all the details of your precedent credit information, and your future growth will always remain in risk because of that.
You risk all you property and assets at the disposal of your creditors. In addition to it, you have to pay a hefty sum to the Insolvency Practitioner, who closely follows your financial transactions.
Due to all these drawbacks, one may opt for bankruptcy. However, the social stigma attached to it cannot be borne by anyone. According to the latest bankruptcy laws, the repayment payment period has been decreased to 12 to 36 months. This means that one can come out of bankruptcy rather earlier, than from an IVA, which takes around 60 long months. - 31377
IVA is an authorized contract between the creditor and the debtor. An individual, as a defaulter, will be limited by law to ensure that he/she forfeits the predetermined amount of money in parts from their wages. If they are not competent to pay their dues in a certain period of time, the contract will be suspended by itself. After that, one will not only lose the money that they have already paid but it will also bankrupt them. Moreover, the IVA sum will be added into the whole amount of debt as well. And subsequently, one will never come out of their monetary disaster.
IVAs are at least made for 5 years. By being stuck with the rigid payment schedule, you cannot undertake another business or a better job, due to the risk factors that are involved. Most IVAs are reviewed annually, and you are supposed to comply with it. Even a small raise in the instalments can make a huge difference to your already constraint resources. If you work overtime, or start earning more, you shall be obliged by a clause in the IVA to contribute half of your additional income to the IVA payments.
During the period of IVA agreement, you will not be permitted to apply for any sort of loan like, credit card loans, house loans and business loans etc. Even if you do that, it will be taken as a serious violation of law, and may result in a legal action against you by your creditors, as they have signed your IVA. This is one of the major disadvantages of having an IVA as you would not be allowed to make any judgment regarding your future.
Until the time when you disburse all the funds as mentioned in your IVA, your score for credit rating will be inactive. And, somehow if you arrange to disburse all the dues, you will never be convinced that you get a constructive response from your future credit cards applications. The file for your credit will retain all the details of your precedent credit information, and your future growth will always remain in risk because of that.
You risk all you property and assets at the disposal of your creditors. In addition to it, you have to pay a hefty sum to the Insolvency Practitioner, who closely follows your financial transactions.
Due to all these drawbacks, one may opt for bankruptcy. However, the social stigma attached to it cannot be borne by anyone. According to the latest bankruptcy laws, the repayment payment period has been decreased to 12 to 36 months. This means that one can come out of bankruptcy rather earlier, than from an IVA, which takes around 60 long months. - 31377
About the Author:
Edward Woodwards is a financial consultant. You can get iva help and solutions to your debt problems. Find out more information at his recommended website http://www.iva.org.uk.
