IVA Advantages

An Individual Voluntary Arrangement (IVA) can have a number of major advantages for consumer debtors and small businesses with overwhelming debt problems as well as creditors.

Advantages of an IVA to you

• An IVA is a private agreement between you and your creditors. A copy of the IVA will be lodged with The governments Insolvency service but , unlike for instance bankruptcy, no formal newspaper notification will be made.
• An IVA is usually far more flexible than bankruptcy. The debtor works with the IVA supervisor to repay what can be reasonably afforded over a fixed period of time.
• It is easier to maintain some banking arrangements in an IVA than it would be as an undischarged bankrupt.
• The single monthly repayment in an IVA can be reduced by more than two thirds compared to the original credit agreements.
• All and charges are stopped so the debt does not continue to increase as the IVA progresses.
• Any legal action is stopped once an IVA is approved.
• An IVA allows the debtor to remain in any directorships and continue to trade as a sole trader.
• A self employed debtor in an IVA can still access trade credit – with the Insolvency Practitioners permission - if the use of such credit will stimulate a greater IVA return to the creditors.

Advantages of IVAs to your Creditors

• The net return to creditors in an IVA is usually higher than a bankruptcy because the maximum repayment period in bankruptcy is 36 months as opposed to 60 months in an IVA.
• The overall costs of bankruptcy are often higher than Insolvency fees in an IVA meaning that the return to unsecured creditors is also improved.
• The actual collection of the debt is undertaken by the supervising Insolvency Practitioner which reduces creditor costs.
• Creditors can claim tax relief on the bad debt against profits.

In you're struggling with debts and are considering your options then we can advise you on all IVA advantages and disadvantages. For more information about individual voluntary arrangements and other debt solutions call 0800 043 50 43 or complete our enquiry form.