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IVA: The Pros and Cons of Individual Voluntary Agreements

Debt can affect an individual's life positively and negatively; it depends on how a person manages it. There are some debts if you work them properly, then they can build your credit score and help you achieve your goals, like buying a property you once dreamed of. On the other hand, if your debt gets out of hand, it will mess up all your finances and can harm your physical and mental health. If you are facing this issue, contact the Best IVA Debt Advice in London; it may help you regain financial control.

What Does IVA Means?

IVA, or Individual Voluntary Arrangement, is a formal way of binding the arrangement, freeing the charges and interest rate on the unsecured debt you owe. It allows you to pay your lender the amount you can afford over the pre-decided tenure. IVA can help you by protecting you from your creditors to commence legal action, like petitioning you for bankruptcy or making an application to the court for your default payments.

Pros of IVA:-

There are several benefits that IVA offers you. Here are some of these benefits so you can check out if it is helpful for you or not:

  1. You pay the affordable amount

Before applying for IVA, your daily expenses will be considered, and the final decision will be made. But if you are facing a financial crisis, it will surely help you, and you only need to pay the amount you can afford. Contact the Best IVA Advisor in London to check your availability.

  1. It helps to protect your assets

IVA helps protect your assets like a vehicle or home, which means you can retain these, provided they are reasonably priced.

  1. Save you from harassment by your creditor

When your creditor has agreed to the IVA proposal, he cannot contact you directly for loan payment as he is legally bound to the arrangement. You can contact your Insolvency Practitioner or their staff to administer the IVA, and then they will deal with your creditor on your behalf.

  1. The charges and interest rates are fixed

Once your creditor approves your IVA, the charges and interest rates will be fixed, and the creditors cannot add on it. In this way, it will help prevent your debt from increasing.

Cons of IVA:-

  1. It will affect your credit rating

The IVA can negatively affect your credit score. When you are approved for IVA arrangement, this will be noted on your credit file and will remain on it for the next six years from the date it is approved. Get Online IVA Advice in London if you find it uncomfortable to share your issues.

  1. You have to follow a strict budget

You need to make a payment to the IVA. Although the IVA agreement is flexible to some extent, you must follow a strict budget for the next few years until you repay the outstanding amount.

  1. IVA is public

At the time you are approved for IVA, you will be listed on the public database known as the Insolvency Register, which is a public database which anyone can search for.

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