The Disadvantages of an IVA | IVA FAQ | Individual Voluntary Arrangement

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Disadvantages of an IVA

Where contributions from income are being made, IVA's are generally expected to be for a period longer than that in bankruptcy, i.e 5 years as opposed to 3 years. The 5-year period is often required by creditors as a bargain for allowing the Debtor to avoid the consequences of bankruptcy.
The amounts required to be paid into the arrangement can leave no disposable income for the debtor, making living on a budget extremely tough.
If the Debtor fails to comply with the terms of the arrangement his home and assets can still be at risk if they have not been specifically excluded from the proposals.
If the IVA fails as a consequence of the Debtor not meeting his obligations under it, it likely that the Debtor will be made bankrupt at this time.
There will be no opportunity for a Trustee in Bankruptcy to investigate the actions of the Debtor or possibility of hidden assets.

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