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IVA Vs Consolidation
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IVA Vs Consolidation
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IVA Vs Consolidation Loans
IVA Pros and Cons
Unlike a debt management plan, an Individual Voluntary Arrangement (IVA) is a legal agreement between you and your creditors that will be monitored by an Insolvency Practitioner (IP), The term of an Individual Voluntary arrangement (IVA) is set, normally 60 months and at the end of the term you will be debt free and any debt not paid within the IVA will be written off. If you have a property with equity you may be asked to release this equity and pay it into the IVA.
Pros
Your creditors write off some of the debt.
Interest and charges are frozen.
You might well be able to keep your house.
You don't face the stigma of becoming bankrupt, and you can keep your job if you're in a profession where you're not allowed to be bankrupt
Your creditors write off some of the debt. Interest and charges are frozen. You might well be able to keep your house. You don't face the stigma of becoming bankrupt, and you can keep your job if you're in a profession where you're not allowed to be bankrupt Cons
After a year, you may have to re-mortgage in order to keep your house and pay off some of your debts.
You can't get significant unsecured credit.
Your credit rating is affected for six years, which means new mortgages will cost more and you might have to put down a larger deposit.
After a year, you may have to re-mortgage in order to keep your house and pay off some of your debts. You can't get significant unsecured credit. Your credit rating is affected for six years, which means new mortgages will cost more and you might have to put down a larger deposit.Consolidation Loans Pros and Cons
Some people feel that debt consolidation loans are the best option. A debt consolidation loans is one loan which pays off many other loans or lines of credit and brings them all into one monthly payment, basically you are putting all your eggs into one basket..
Madison Financial has put together a quick Pros and Cons list to help you make the correct choice to consolidate debt
Madison Financial has put together a quick Pros and Cons list to help you make the correct choice to consolidate debt
Pros
One Monthly Payment, rather than paying each individual creditor payment
Debt consolidation normally benefits from lower interest rates
Only have to deal with one creditors rather than dealing with all creditors individually
One Monthly Payment, rather than paying each individual creditor payment Debt consolidation normally benefits from lower interest rates Only have to deal with one creditors rather than dealing with all creditors individually
Cons
Easy to get into more debt when consolidating
Longer period of time to repay your consolidation loan
Will Cost you more in the long run, because you are borrowing more over a longer period of time
Your credit rating will be affected
Consolidation loans can turn unsecured debts into secured debt
Easy to get into more debt when consolidating Longer period of time to repay your consolidation loan Will Cost you more in the long run, because you are borrowing more over a longer period of time Your credit rating will be affected Consolidation loans can turn unsecured debts into secured debt