Advantages & Disadvantages of an IVA
Advantages
All your creditors are bound by the agreement regardless of whether or how they voted.
75% of creditors who vote have to vote in favour in order for the IVA to be approved.
- You will know exactly how long you will have to pay into your IVA. The term is usually 5 years
- An IVA offers less restrictions than Bankruptcy
- The IVA is not reported in local legal notices
- Individuals are free to continue in certain professions and are not disqualified from acting as a company director
Disadvantages
- Assets such as equity in your property will be included in your IVA
- You are legally bound by the agreement and should you default your IP may petition for bankruptcy
Creditor
Someone you owe money to.
Unsecured lending
Total loan & credit card debts excluding your mortgage and any hire purchase.
Country
The country you currently live in.
Insolvency Practitioners
Also known as an IP, a person who specialises in formal insolvency cases.
Valuations
The process of determing the current value of an asset.
Equity
The difference between the market value of a property and the claims held against it.
Lender
Someone you owe money to.
Eviction Order
A court order by which a person may be evicted.
Arrears
An unpaid and overdue debt.
Disposable Income
The amount of income left to an individual after taxes have been paid, available for spending and saving.
Statement of Affairs
A financial report showing assets and liabilities at expected liquidation values and shareholders' equity.
Insolvent
Unable to meet debt obligations.
Secured Loan
Money borrowed using goods or property as a guarantee.