What you should know before you enter into an individual voluntary arrangement

An IVA is simply an agreement that is legally binding. What this implies is that if you enter into such an agreement, whichever firm you owe money would not be able to take any form of action against you. They would also not be able to make contact with you as regards payments as long as you maintain your payments according to plan. Creditors do not have the legal right to go after you beyond the arrangement, meaning that every contact that asks for payment ought to cease. It is also worthy of note that your debts can be cleaned off after about 5 years.

 What is usually proposed is 60 monthly payments and the moment it is completed, you will become free from all forms of debt. However, in the event that you are not able to release any equity from your property, you may have to pay 12 other payment. There is also the risk of your arrangement failing if you do not carry out all the payments, also, all of your debts will not be cancelled and you could face a scenario where there could be a reapplication of interest charges.

Stays 6 years after your plan begins

It is worthy of note that the individual voluntary arrangement remains on your credit file for up to 6 years after the beginning of your plan. Since the arrangement is programmed in such a way as to last for an additional year, thus it is not really as terrible as it may sound. Have it at the back of your mind that you should be able to become free from debt after five years if you abide by the rules of the arrangement. What this implies is that if a reasonable amount of your debt owed is written off, you should be able to get yourself a fresh clean start.