Licensed insolvency practitioner Philip Beck said that there are debt management experts out there worth consulting as taking out an IVA is “not a quick way out”.
Instead, bankruptcy is the “quick way out” but entails negative effects that will show up on credit ratings and make it hard to get a mortgage or even a credit card.
“An IVA involves a debt write-off,” said Mr Beck. “You pay what you can afford to pay and you have to stick with it for five years”.
However, he highlights the fact that both debtors and creditors often favour IVAs because the arrangement can suit both parties due to the terms of repayment.
Despite this, Mr Beck stressed the need for proper debt advice before taking out an IVA to ensure that it is suitable.