Home > Getting Out of Debt > Five Ways an IVA Can Help You

Five Ways an IVA Can Help You

By: J.A.J Aaronson - Updated: 24 Oct 2012 | comments*Discuss
 
Iva Individual Voluntary Arrangement

Individual Voluntary Arrangements (IVAs) are an increasingly popular means by which borrowers can deal with debt that has got out of hand. They are seen as a positive alternative to bankruptcy, and can help you tackle debt head on.

So how could an IVA potentially help you?

1. You may avoid bankruptcy

Perhaps the biggest selling point of an IVA is that it is not bankruptcy. An IVA is a significantly more flexible option than bankruptcy, and many people opt for this type of arrangement for this very reason.

You must remember, though, that entering into an IVA does not necessarily mean that bankruptcy is no longer on the cards. If you fail to keep to the agreement your creditors can still petition for your bankruptcy. Similarly, if you wish to file for bankruptcy yourself at a later date, you may be free to do so.

2. You can hold onto your assets

If you opt for bankruptcy, you are likely to lose any assets of value. This most frequently includes your house and your car. An IVA, however, gives you the option to exclude specific assets. In practice, this means that you are far more likely to be able to hold onto your home – although you should remember that this may still be at risk if you fail to stick to the agreement.

3. It can be mentally beneficial

One of the most important, and yet most often overlooked benefits of an IVA is that it can help to alleviate the worry of debt. By making the decision to pursue an IVA you can demonstrate to yourself that you are tackling the problem head on, and you can make progress towards getting out of debt. This can be a huge relief.

4. It can help you deal with debt

An IVA is a binding agreement, and you will be expected to keep to it. This can be a great force to help you deal with your debt. If you are legally forced to make repayments of a certain level each and every month, you will at least know that you are gradually paying off the money you owe.

It might be painful making the repayments in the short-term, but at the end of the process you will be free from the shackles of debt.

5. You can still trade

A major benefit of an IVA is that you will retain your ability to trade as a business. You can carry on as a director of a limited company, and you are not required to tell people you have entered into an IVA. This is in stark contrast with the restrictions placed on bankrupts, who are unable to act as directors and who must declare their bankruptcy to all interested parties.

IVAs are potentially very useful tools to help you deal with debt. But it is important to remember that entering into an IVA is a major step with significant financial consequences. You should therefore make sure that you seek independent advice before taking any action.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    Lib - Your Question:I was made redundant 3 years ago. I have been living abroad 5he last year & half. I am now back in the UK…
    27 July 2017
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    Amy - Your Question:Im 17 years old and have 20 days until I have my baby at the moment I am getting income support but I am…
    27 July 2017
  • Lib
    Re: A Guide to Unemployment Benefits
    I was made redundant 3 years ago. I have been living abroad the last year & half. I am now back in the UK but I am Ill &…
    27 July 2017
  • Andrew
    Re: A Guide to Unemployment Benefits
    hi, my son has just given up his part time job and will be unemployed for 1 month,while he waits to start his Masters in mid…
    26 July 2017
  • Lib
    Re: A Guide to Unemployment Benefits
    I was made redundant 3 years ago. I have been living abroad 5he last year & half. I am now back in the UK but I am I'll &…
    26 July 2017
  • Amy
    Re: A Guide to Unemployment Benefits
    Im 17 years old and have 20 days until i have my baby at the moment i am getting income support but i am wondering if there…
    25 July 2017
  • Roxy
    Re: How Much Tax do I Have to Pay?
    My husband has started a new job if he gets £560 a week how much will his take home be after tax?
    25 July 2017
  • MoneyExpertise
    Re: A Guide to Unemployment Benefits
    Sue - Your Question:I'm 60 years old the carer for my 7 yr old grandson and after 17 years of working for the same company I…
    21 July 2017
  • Ade
    Re: How Much Tax do I Have to Pay?
    @Robhattan1 - he will get a tax return if he earns below £11,500, or even if he earns above he still might have paid too much tax.
    21 July 2017
  • Sue
    Re: A Guide to Unemployment Benefits
    I'm 60 years old the carer for my 7 yr old grandson and after 17 years of working for the same company I have been offered a…
    21 July 2017
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the MoneyExpertise website. Please read our Disclaimer.