PROS AND CONS OF IVA

Date: 2012.01.11 | Category: Finance | Tags:

An IVA helps to avoid bankruptcy. It was a law, passed in the United Kingdom considering the Insolvency Act established in 1986. It is an agreement with the creditors in a contract basis. The capital, income and third party payment are important factors and make the IVA a flexible body. The arrangement should be a planned process. The debtors should have enough money remaining from its income and expanses to make an arrangement. Another option that remains open for the debtors is that they could have gone for a debt management plan. Debt management plan is also an easy process for calculating the disposable income and finding an easy process in redeeming the debt.

However there are lots of advantage and a few disadvantages for IVA. The debtors and creditors can make an agreement in private and avoid the attention of public in financial matters. The terms of this arrangement seems to quite flexible and has duration of about five years. However no such fixed term is set. The arrangement does not allow any partnership to be established. The fees are separated in two types. This are not taken separately, they are paid along with the agreement and is considered as a part of the agreement fees. However IVA is an important beneficial factor.