The Downside of IVA

Individual Voluntary Arrangement, or IVA for short, is a great help in attending to our financial obligations. It also saves us from resorting to bankruptcy due to the fact that we cannot pay our debts to creditors. Yes, we all know that IVA is very advantageous. But we must also know its downside if we want to maximize its potential help for us debtors.

First, in order to obtain an IVA, you need a third party. This third party is called the Insolvency Practitioner. He helps you in everything about IVA. Since you need a third party, then it also means that you will spend an extra penny for it, which will cost you a lot.

Since IVA needs an approval from 75% of your creditors, you need to convince those 75% in order for it to be in effect. You should state that you have the interest in paying your creditors. There is nothing wrong with this, but it will take you a lot of time and effort only to convince them.

Let's say a County Court Judgment, or CCJs, has been issued against you. The chances of getting a 75% approval from your creditors will be diminished because creditors will think that the law is on their side, thus, will not probably agree to your IVA proposal.

Lastly, if IVA is in effect, you should follow its provisions strictly. You should pay your dues on time and pay the exact amount, etc., in order for the creditors to honor it. If you breached any of the provisions in the IVA, then there is no reason for continuing it, thus, the agreement will be canceled.

Despite all of these disadvantages, IVA will be a great help to you. If you weigh its ups and downs, the ups will suffice the downs, so when you have financial difficulty of paying your creditors, think of IVA.