Benefits of IVA
For individuals seeking to file for bankruptcy, an alternative method exists that offers to solve your financial problems and it is called IVA. This is an agreement where both creditor and debtor agree that a part of the initial debt amount is repaid during the extensive period of the IVA. The chief benefit of using IVA is that it protects assets like the car and home, which are placed at risk when you file for bankruptcy.
1. No career restrictions
The best benefit of IVA is the fact that it will not affect your career. Actually, it has limited effects on the rank of the debtors. However, this is not the same in bankruptcy. Here, there are several restrictions placed on specific types of employment such as individuals in charge of public office and accountants.
2. Freezes interest
The IVA works to freeze interest so that it does not continue growing to an unmanageable size. Late payment and interest charges will be stopped the moment creditors approve the IVA. As such, addition of more charges and interests is forbidden by law when your IVA is permitted.
Unlike bankruptcy, which is publicly reported in the newspapers or television, an IVA will remain a private affair. Entering into this particular agreement is an absolutely private contract between debtors and their creditors. In consequence, the IVA carries lesser stigma in contrast with bankruptcy.
4. Reduces contact with a creditor
As soon as your IVA is permitted, you will benefit from no more calls from your creditors. It provides peace as you will no longer require facing unending demands to complete your payments from your creditors through telephone or letters.
The demerit associated with the IVA is you cannot borrow any more loans for the 5 year period that the IVA is in effect.