IVA – does it receive a bad rap?
There have been many news articles urging caution over taking out an IVA (Individual Voluntary Arrangement) as an easy and effective way to get out of debt.
A recent report by Which magazine has been the main culprit along with many online blogs as people try to thrash out the pros and cons of an IVA.
An IVA is not an agreement that should be entered into lightly as it requires a long term commitment of five years and is only really suitable for those with debt above £15,000 as smaller debt can be resolved through debt consolidation or debt management . An IVA is a very favoured alternative to bankruptcy, but is not a quick fix solution to your debt problems.
The wording of the report in the Which article could be misunderstood and lead people to think that IVA companies are out solely to line their own pockets by making unscrupulous promises to clear debt and lure people into signing up to IVA schemes so as they can cream off the profits.
An IVA is the perfect debt solution for those who are happy to remain on a tight, budget for five years. Debtors should also be aware that they will not be able to obtain credit and opening a bank account could be impossible.
To get the best from an IVA, a debtor should ensure that the company he chooses to work with has an excellent reputation. Also, the negative comments about creditors rejecting an IVA are debatable as many creditors see an IVA as an end to costly court proceedings and a sure-fire way to receive a fixed final sum. They also favour an IVA as it provides a quicker and larger return than bankruptcy settlements. Talk to the Debt Advice Trust for more information on IVA.
