How an IVA Can be Beneficial

If you are considering applying for an IVA (Individual Voluntary Arrangement) then you will perhaps want to know some of the benefits. Seek IVA debt advice now for a solution to your debts. There are of course advantages and disadvantages to any kind of financial arrangement, but what most people seek is a payment plan where the good sides outweigh any bad ones.

Now it is even more important than ever for those who are in debt to have an outlet for paying it off, and an IVA is conveniently spread out over a certain agreed period after the creditors agree to it. One of the most attractive things about an IVA is that it can span several years, which will suit those with higher levels of debt and no means of paying it off in one lump sum.

A prime advantage of an IVA is that you pay a fixed sum of money each month over a fixed period. This certainty brings you closer to your goal of eliminating your debt. Aside from this, the fact that you know how much you are going to have to pay each month provides you with the peace of mind of knowing that what you are paying is not going to randomly increase. Of course, if your circumstances substantially change you may be expected to increase those payments but generally increases in income pay for additional household expenditure which increase in line with the cost of living. You can get into a routine of paying this fixed sum, while having the same amount of money leftover for your living expenses during the month.

Furthermore, with an IVA there is no interest to be paid. Any interest that you might have accrued stops building once the agreement has been made. In this way, you know what you are paying and don’t need to worry about costly interest rates. In essence, an IVA caters to what you as an individual can afford to pay, so it is means tested in terms of your own earnings. Taking this number into account, a sum that you can afford will be agreed upon, meaning you will not be in a position where you are paying money that you would otherwise need for basic day to day living.

Although your credit rating might suffer while you are paying your IVA, it will begin to recover once you have completed your payments, so you can work your way back to a healthy financial position. Generally individuals learn to budget and live within their means during the IVA period as no credit is allowed until the IVA is concluded. Another pro to the agreement is that you will have a set date to work towards when your payments will be finished, allowing you to envisage a future where you are debt free. Having this to look forward to will definitely be what makes all the hard work and pain worth the effort.

If you have a house that has equity in it the property could be at risk of being sold if a creditor makes you bankrupt. The IVA seeks to protect the family home from being sold but you may have to bring some equity, if there is any, into the IVA towards the end.

While it is great that you are taking into consideration the advantages listed above, you should always seek IVA advice from a professional before making any decisions about how you are going to manage your debt so contact X-debt now.