IVA

IVA

IVA

IVA – Individual Voluntary Arrangement.

A Debt Solution to help you pay all or a part of your debts over a pre-decided period.

Are you struggling to pay off all your debts? Well, you can explore the option of going for an IVA.

 

What is an IVA?

An individual voluntary arrangement, a legally binding one. It’s a formal agreement between you and your creditors. This arrangement enables you to pay off all or a part of your debts in an affordable manner.

In simple terms, through this procedure, you make an offer to your creditors based on how much you can afford.

One can only get an IVA with the help of an insolvency practitioner. It gets started if at least a 75% of your creditors agree to it, even if the remaining ones do not.

 

You get two options:

1. An opportunity to pay your debt in a lump sum, also called a lump sum IVA.

2. Or a choice to make regular payments to your insolvency practitioner. The practitioner can then divide the money between your creditors. The repayment period could be for 60 or 72 months.

 

IVA

 

How can I get an IVA?

As a first step, you contact an insolvency practitioner and share the details. These details should include your total debts, your creditors, your income, expenses, etc.

He will then contact your creditors to get an IVA started. By doing so, the practitioner stops your creditors from taking any action against you.

 

Things to keep in mind while going for an IVA:

  • This arrangement is only available in England, Wales and Northern Ireland. It is not available in Scotland.
  • It gives you more control over your assets as compared to what you get in case of filing a Bankruptcy.
  • One must find out if an IVA is right for their situation and how much it would cost. Not everyone qualifies for it.
  • Your IVA can be cancelled if you don’t keep up with all the repayments.
  • An IVA gets added to the Individual Insolvency Register. It gets removed three months after your IVA ends.
  • Customer’s credit ratings get affected for six years.
  • During an IVA, you are not allowed to take out any new debts above £500.

It’s a form of insolvency and can impact your financial situation. Before going for an IVA, you must take the impartial and professional advice to find out how it could affect you.

 

Thinking about an IVA? Contact your financial adviser, now. 

 

Also Know:
What is a County Court Judgement (CCJ)?

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