Advantages Of An IVA?
One affordable monthly payment
Protection from creditor action
Interest and charges dealt with under the IVA
Unaffordable unsecured debt can be written off on successful completion
You can normally remain in your home
You can usually keep essential assets
A fixed end date
Potential flexibility if circumstances change
Your creditors receive a structured repayment
Advantages Of An IVA?
It affects your credit rating
You have to stick to the agreed payments
Not every debt can be included
You have restrictions on borrowing
You must disclose relevant assets and windfalls
Your home can affect the length/terms of the IVA
An IVA isn't guaranteed to be accepted
Potential flexibility if circumstances change
Fees are payable
It can last longer than five years in some circumstances
Failure can have serious consequences
| Advantages | Disadvantages | |
|---|---|---|
| Monthly payments | Payments are based on what you can realistically afford. | You must maintain the agreed payments throughout the IVA. |
| Debt | Unsecured debt included in the IVA can be written off when you successfully complete the arrangement. | Not every type of debt can be included in an IVA. |
| Creditor action | An approved IVA can restrict creditors included in the arrangement from taking further action to recover the included debts. | You must comply with the terms of the IVA for the protection to continue. |
| Your home | You can normally remain living in your home during an IVA. | Home equity can affect the length and terms of an IVA. |
| Assets | Many essential household items and assets can normally be retained. | Some assets may need to be dealt with as part of your IVA. |
| Duration | An IVA has a defined end point if you meet its terms. | An IVA will usually last five years, but some Protocol IVAs can last six years. |
| Borrowing | Your existing debts can become more manageable through one structured payment. | There are restrictions on taking out further credit during an IVA. |
Want to understand a particular part of an IVA?
Our detailed guides explain how an IVA may affect different areas of your finances and what you need to know.
- How an IVA affects your house and home equity
- keeping your vehicle during an IVA
- How an IVA affects your credit rating
- IVA fees and costs
- IVA vs bankruptcy
- Problems with an IVA
Get Expert Debt Support Today
Get debt help online or call our FREE Helpline on 0800 3688 286 (freephone, including all mobiles) for a confidential conversation.
Sources and Further Information
GOV.UK – Key Facts: Protocol Individual Voluntary Arrangements
Insolvency Service – What you need to know about IVAs
MoneyHelper – What is an Individual Voluntary Arrangement?
