Advantages of an IVA:
One advantage of an IVA is that, once the creditors approve the terms, the individual can make affordable monthly payments based on what they can realistically afford. This helps them avoid bankruptcy while still addressing their debt.
An IVA will also prevent the Creditors from taking further legal action and all outstanding debt will be written off.
Disadvantages of an IVA:
A disadvantage of an IVA is that it will remain on the individual’s credit report for six years. This is because it is based on financial history and shows that they have struggled with debt management, lenders will then be sceptical about approving any forms of credit as a result.
Another downside of an IVA is the potential risk of bankruptcy. If the individual fails to make the monthly repayments or adhere to the terms of the IVA proposals, the Insolvency Practitioner (IP) can terminate the IVA, which may lead to bankruptcy.
