There are a lot of times when we place ourselves in tough economic situations due to making poor financial decisions. As a result, we get drowned with debt as we try to compensate for our expenses. Fearing the worst, our economic situation could even lead to bankruptcy, where all our assets will have to be taken away from us, just to pay off our debts. Just when bankruptcy seems to be the best idea to solve your problem, you can go and apply for debt relief loans; or better yet, enjoy IVA benefits when you apply for an individual voluntary arrangement.
What Is Individual Voluntary Agreement?
An individual voluntary arrangement is an option for many persons who seek to solve their insolvency from the debts they made from their creditors without having to file for bankruptcy. IVA has a long history of being applied for by many entrepreneurs who have had problems with debt control and management, and as a result, they are faced with an insolvency. Business owners have long used an individual voluntary arrangement, but recently, its advantages have made persons with personal bankruptcies apply for individual voluntary arrangements. There are several reasons why people who have debts still choose to apply for an individual voluntary agreement. However, there are always two sides of a coin; there are many IVA pros and cons, and there are also considerations which must be made before you apply for an IVA.
Individual Voluntary Agreement Benefits
Since IVA provides a promise for individuals who want to pay off the debts they owed their creditors, people are now looking to take the benefit of being granted an agreement (of course, under strict regulations). Some of the IVA advantages include:
1. IVA is strictly regulated under the federal code of the country. Creditors are still under the jurisdiction and power of the law, meaning you, as a creditor, are protected by national legislation.
2. An IVA gives citizens with debts a chance to try and pay off their outstanding debts, offering reasonable interest rates and a monthly payment term as compensation for the debt relief loan.
3.An IVA can give the members of an association (especially the veterans and persons with a disability) more flexible payment terms and interest rates to match their capability to pay, meaning each term is unique to a specific applicant.
4. A successful applicant will receive an amount to help them in buying back their properties under a mortgage.
5. If a person has many assets which are too valuable to give up when filing for bankruptcy, it helps them protect these assets (such as luxury cars), giving them the full IVA benefit of paying their loans while retaining property ownership.
Disadvantages of Individual Voluntary Agreement
As mentioned, IVA also has its fair share of cons. For one, many people advise individuals with insolvencies to pay their debts by other means first, given that IVA is a step closer to bankruptcy, meaning this can potentially hurt your credit score or reputation in the future if you are not able to pay the capital back on time. The key to combat against this, however, is to make sure that you pay your fees (along with interest) back on time. IVA application is also a tough process, as it requires rigorous screening from the creditor before you are granted your cash advance.
With the mentioned things above, IVA can surely give many people in debt a chance to redeem themselves. IVA offers an alternative solution to bankruptcy, given that it is somehow similar to a debt relief loan but with a more friendly manner. There are many benefits that one can get from IVA and ultimately, these IVA benefits will get you to financial freedom in the future.