Learn About IVA
Learn about IVA
Individual Voluntary Arrangements or IVA is a legal agreement between you and your creditors, sometimes mediated by Insolvency Practitioners (IP). This is a proposal for your creditors where it contains your plan to pay off your debts within a given time frame. Most of the time is within 3 – 5 years. IVA is applied to by those that see no other way to pay off their debts; it is usually one step away from bankruptcy. Although, not all can be approved for IVA there are certain requirements before one will be permitted to apply.
IVA needs certain net income, and a sound plan before creditors agree on your proposal. In UK, your disposable salary should be at least 200 ?. The amount will be agreed upon by all parties concerned, you, your creditors and your IPs. Then, all your creditors would need to be present at the time your proposal will be presented, if at least 75 per cent of them agree, then you are on your way to being debt- free. The remaining 25 per cent will adhere to the IVA.
IVA is a lifeline extended to you by your creditors, they are willing to enter into a legal contract that will provide you with all the benefits. Once your creditors agree on your IVA, collection agents from creditors and the IPs will work side by side so as to stop getting in touch with you regarding your payments, be it on the phone or by demand letters. You would also be protected against legal action from your creditors as long as you are paying the amount agreed upon on your IVA. Throughout the course of your agreement, the interest rates and charges will be fixed.
However, IVA will also have some effects in your life. For one, throughout the course of your IVA, you will not be allowed to obtain unsecured debts. You will be prevented from getting credit cards, or even store cards. Such measures are taken to assure that you will not get into other debts. After your IVA rest assure that your credit rating will be returned favorably. All your remaining debts will be written off by the end of a successful IVA.
Entering an IVA is a dignified way of paying off your debt. Do not be concerned as to it being publicized; your case will be confidential to protect you and your profession.
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A debt management plan is one option for breaking free of unsecured debts. You would work with a third party who would get in touch with your creditors and work out a plan for you to pay back the money you owed over a period of time, usually with reduced payments. Once you have gone into the deal creditors will not be on your back for payments and if you stick with the plan you will have become debt free once the term of the plan has been reached.
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