What is an IVA and its advantages
What is an IVA? An IVA is a legal contract between a person and its creditors. It is a legally binding arrangement supervised by a licensed insolvency practitioner, whose sole purpose is to enable the person to reach a compromise with its creditors and avoid the consequences of bankruptcy. But still the question arises that what is an IVA and exactly does it helps? Like everything, even an IVA has its advantages and disadvantages. We would focus on its advantages. These advantages will elaborate the answer to “what is an IVA”? First is that the person pays back a percentage of his or her debts. If the agreed terms are followed, he or she will be debt free in 5 years time.
Another advantage is that this is a legally binding solution. So, further interests or charges can be added to the debt. The creditors cannot change their mind once they have agreed. Even agreed monthly payment plans will remain fixed unless the income level of the person drastically increases. It is a private agreement and only the debtor, the adviser and the creditors will have the information about it. There is no publicity in the local newspapers, as is the case for bankruptcy. The person can open a regular bank account, without an overdraft facility and have no or fewer restrictions than if that person goes bankrupt. Above advantages clearly elaborates the answer for “what is an IVA”?