The common pitfalls of entering an IVA

As with any debt solution, an IVA has potential pitfalls that you should make yourself aware of, if you intend to make an informed decision on how best to tackle your debt problem.

Here at My IVA Adviser, we believe it's our responsibility to inform you of the IVA pitfalls right from the beginning, and not to solely focus on the advantages of an IVA.

The Pitfalls Of An IVA

Fortunately, there aren't many pitfalls related to the IVA solution and, for the most part, they're well documented.

How they actually affect you will be determined by your personal circumstances but, if you would like to discuss the affects with an adviser simply call 0800 088 7503.

Here are the IVA pitfalls that we think you should be made aware of:

  • An IVA will affect your credit rating:
    The IVA will be marked on your credit file and it will stay there for 6 years, even if it completes early. Creditors use your credit rating to assess whether you are creditworthy and in most cases will reject your application whilst your IVA is visible on your credit file, even if it has successfully completed.
  • An IVA is formal arrangement:
    When the IVA is agreed at the Creditors' Meeting, the IVA becomes legally binding on all parties. This means that you are committed to the terms of the IVA. If you're unable to comply with these terms, your IVA could fail.
  • IVA payments are set:
    Once the IVA is agreed you'll be expected to maintain your IVA contributions. Help will be at hand if you find your IVA budget changes, but only modest changes can be implemented without going back to creditors for a variation to the original agreement.
  • An IVA has a fixed time period:
    Of, normally, 5 years. You'll need to be confident that you can maintain your IVA contributions throughout this duration, otherwise there could be IVA payment problems. Although, for serious changes in circumstances, your Insolvency Practitioner has the discretion to provide a 6 month payment break if necessary.

It's fair to say each IVA is different. As a result, there may be other IVA pitfalls, specific to an individual case that we haven't mentioned here.

That's why it's advisable to have a chat with one of the My IVA Adviser team, prior to making a decision.

Getting IVA Help

If you would like to explore the IVA option in detail, perhaps to establish exactly how the IVA pitfalls will impact on your personal circumstances please call the team at My IVA Adviser on 0800 088 7503.

Because we operate a No IVA = No Fee policy, your consultation will be free, you're not obliged to follow our advice and our conversation will be held in the strictest confidence.

If you'd prefer us to call you, please complete this form and one of the team will call you at your preferred time.

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In accordance with the Financial Conduct Authority's guidance, please follow this link if you would like to read a free guide about In Debt - Dealing with your creditors
To find out more about managing your money and getting free debt advice, visit Money Advice Service , an independent service set up to help people manage their money.

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