What is a disadvantage of Individual Voluntary Arrangements (IVAs)?

Choosing to engage in an Individual Voluntary Arrangement (IVA) can provide a structured means of managing debt, but one notable disadvantage is the typically high setup costs involved. These costs can include fees charged by the insolvency practitioner who manages the arrangement, as well as other associated administrative fees. While the purpose of an IVA is to provide relief from financial pressure and negotiate with creditors, these initial financial barriers can deter individuals from pursuing this option.

In the context of the other options, they represent advantages or misleading aspects. The quick setup (first option) is often seen positively, while an IVA usually does not enhance a credit rating immediately (third option) and indeed may negatively impact it in the short term due to its presence on the credit report. Additionally, the notion that IVAs require no commitment (fourth option) is misleading, as they do require ongoing payments and adherence to the terms set forth in the agreement.