4 Things to consider when deciding if an IVA is a good debt solution for you

Do you find yourself buried under a mountain of debt and you do not know what step to take next? There are many options available for those who would like to get out of debt. One of the most common is, of course, filing for bankruptcy, but that would mean that your assets will be ceased.

Another option you may have is getting an IVA. If you do not know yet what an IVA is, it is a binding contract between you and the bank or a credit card company. Both parties will agree on a set period of time, usually within five years for you to pay all your debts. The main advantage of the IVA is that you get to keep your house and other assets.

But you also need to be sure that this is the best solution for your debt problem. Some get enticed with marketing strategies announcing that with the IVA, you can get rid of 75% of your debt. That is not what the IVA is for. Know more about IVA from Creditflix.

Also, read through the list below to check if IVA is really the best solution for you.

1. If you have less than 10,000 in debt, you might not need an IVA – while 10,000 may seem like a big amount to you, there are still those who owe a lot more than that. Take a look at your total debts and see if you can find a way to adjust your spending. Take note also that not all debts may be included in the IVA so better do your research and consult with a professional first so that you can get sound advice.
2. If you don’t have regular work or you have a fixed term contract – the agreement in an IVA states that there is a specific amount that needs to be paid, usually in monthly payments. IVAs are usually paid over a period of five years. If your contract only lasts for a year or less, and you are not sure when you will get a regular job, then an IVA may not be the ideal situation for you.
3. Consider if your financial situation will change within the period of IVA agreement – are you looking to travel in the next couple of years, or maybe you are planning to expand your family and have another baby, all these must be taken into consideration if you are planning to get an IVA. These changes will mean additional expenses for you and your family. Unless these changes also equal to increase in your salary, you will have to restructure your budgeting to allow for new expenses. This may endanger your payment to the IVA, and if that happens you will be breaching the contract between you and the creditor.
4. You might not get a good credit rating – you might be looking to get a good credit rating, but once the company finds out that you have an IVA, there is a big possibility that your credit score will not be good. Know more about IVA from Creditflix