Advantages & disadvantages of Individual Voluntary Arrangements (IVA)
IVA is a formal agreement between you and your creditors where you will come to an arrangement with people you owe money to.
Below we have compiled a list of the major advantages and disadvantages of Individual Voluntary Arrangements (IVAs).
ADVANTAGES
- No publicity (no public notices or advertisements).
- Avoids the stigma of bankruptcy.
- Creditors usually receive a greater dividend than what they would expect in a bankruptcy.
- More flexible than a bankruptcy in that you have more control over your assets and payments to creditors. The length of term of the arrangement can also be varied.
- Permits an individual to hold certain offices such as director of a limited company.
DISADVANTAGES
- Failure to comply with the terms of the IVA may result in eventual bankruptcy
- There is no guarantee as to how the creditors’ will vote
- Creditors may wish to vary or modify the proposal
- In very few instances the initial costs for the Nominee’s fees need to be paid in advance
- Further credit is usually prohibited within the term the arrangement
For frequently asked question regarding IVA’s click here
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