When creditors are chasing you, you are struggling to pay rent and even affording groceries is becoming a super stressful thought, you know it is time to make a decision to get your finances tidied up. If you are at that stage, chances are you probably won’t have the clearest mind to create a list of IVA pros and cons as you consider your options, so we have done one for you.
Like anything in life, there are sacrifices that you need to make in order to achieve your desired outcome. The question is whether the upside is worth the sacrifice you have to make.
Hopefully, this article gives you some food for thought as to your next step in overcoming your financial Mount Everest and getting back onto your feet.
IVA – the Cons
Let’s start with the Cons of getting an Individual Voluntary Agreement set up.
- Stigma. Because this will be listed on the Personal Insolvency Register which is available to the public, there can be a little stigma attached to having an IVA in your name. It is unlikely that your friends, family or neighbours will check on this as it is mostly used by companies who are assessing creditworthiness and risk of dealing with a particular person
- Length of time. An IVA usually lasts up to 5years. For some people, this is a long road back to financial stability and they prefer to just declare bankruptcy and to try and rebuild from there. The length of time can vary and it is important to keep in mind that over this time, you can be rebuilding your credit rating and learning how to properly manage your finances to avoid the same situation occurring again.
Now for the upside. The pros of getting an IVA.
- You will still have the ability to obtain credit if required and trade as a business owner
- Freeze interest rates and late fees and provided you meet your obligations, creditors cannot alter or hike up rates at a later date
- One monthly payment to just one creditor instead of many so you never have to deal with debt collectors calling, emailing or sending threatening letters
- Protection of your home or significant assets. An IVA will prevent any further action being taken against you from creditors.
- Taking ownership of your situation and the pride in overcoming your hardship
- It will give you time and breathing room to rebuild your financial life from the ground up and put strategies into place to avoid this scenario again
With any decision, it is important to weigh up the good vs the bad and we hope this article comparing the pros and cons of an IVA gives you some food for thought when making your next move toward regaining control over your finances.
We are keen to help you get relief from your debt problems.