Advantages

• Legally binding on your creditors.
• Prevents further legal action.
• Freezes all further interest and charges.
• Normally creditors write off some of their debt.
• You will keep your property if you are a homeowner.
• Procedures available to take account of changed circumstances.
• Will normally allow you to continue to trade, if you are self employed. You can also in most circumstances continue to act as a Director of a limited company.
• Will provide protection for unknown debts such as unpaid tax or overpaid tax credits.
• Overseen by an insolvency practitioner who is highly regulated and fully insured.
• Highly flexible and can include a lump sum in full and final settlement with potential completion of the IVA in a matter of months.

Disadvantages

• You will normally pay in to an IVA for 2 more years than a bankruptcy.
• Your credit record will be adversely affected until one year after successful completion of your IVA.
• Your details will be entered on to a register that can be accessed via the internet.
• If you receive unexpected money during the IVA, such as an inheritance or a PPI refund, you will have to pay the proceeds in to the IVA.
• If you are a homeowner you will be asked to attempt to release equity in to the IVA in the last year.