IVA Disadvantages

As with any financial agreement, there can be some drawbacks to it. A brief selection is listed below but for more information you should contact our expert advisors on 0808 131 0038. 

Disadvantages of an IVA: 

  • Your unsecured debt must be greater than £15,000.
  • It is a complex legal procedure.
  • You will need to make your monthly payments, and missing these could result in your creditors taking further action against you.
  • At least 75% of your creditors must agree to the IVA proposal.
  • It is a 5 year commitment.
  • You may have to re-mortgage your home so some of the equity can be released to your creditors.
  • Your credit rating will be affected for up to six years. 

 



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Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)
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