Do I need an IVA?
You might. The Individual Voluntary Agreement is designed for individuals earning less than is possible to pay off certain debts. If you have an overwhelming amount of debt so that the unsecured loans that you have cannot be paid off simply and have accumulated over time, then you might need to consider using an Individual Voluntary Agreement to extricate yourself from this financially precarious situation.
Does it cost more to use an IVA compared to other debt solutions?
Yes. One can say that using an Individual Voluntary Agreement is more costly than other solutions such as bankruptcy. This could be due to two major reasons. One reason is having to hire an insolvency expert to help you through the entire 60 month period when the contract is valid. The other reason is that you may pay over a longer period of time therefore costing more in the end. However, the benefits of avoiding social stigma and handling your financial responsibilities in a dignified manner far outweigh the cost.
How can I approach my creditors about an IVA?
You do not. Creditors are not approached by the individual debtor in any IVA. This is done in order to avoid hostile encounters between the two groups. You creditors can only be approached and negotiate with the insolvency practitioner that you hire in order to give you the best chance of resolving your financial issues through an IVA. Do NOT attempt to approach the creditors directly over any issues in the IVA as it is also illegal for these individuals to communicate with you directly about your debt.
Does the IVA have any repercussions on my credit rating?
Yes. Like almost all other debt solutions, the Individual Voluntary Agreement does impact the credit rating of the debtor. Once the IVA is in place, this information is available to the public and can be viewed by potential lenders or employers. The record remains in the public domain for at least six years in a similar way that a past of bankruptcy is visible. Unfortunately, this credit rating can affect the ability to procure other funds from other financiers who may feel that an IVA shows that they are unlikely to be paid in the end. However, this is just a perception, if you can prove financial responsibility after an IVA, there may be people willing to lend you money.
Is an IVA a public declaration?
Sort of. The record of an Individual Voluntary Agreement is public and can be viewed by anyone looking at your credit history. However, the main benefit of the IVA is that it does not have to be declared to employers especially in financially oriented professions such as accountants or within the government such as police officers who may face more serious repercussions such as having to quit their jobs.
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