What is an IVA?
For those in debt, paying off and credit increase are two of the most important priorities. IVA, IVA debt management, or Debt Relief Orders might be words familiar to the finance gurus, but a lay person is usually caught unawares. An individual voluntary agreement (IVA) is an agreement between you and your creditors to help you pay off your debts at an affordable rate.
How does an IVA work?
An IVA is an agreement between you and the people you owe money to. The debtors can be corporations or banks. An IVA is a legally binding agreement. An IVA is usually the only option for debts worth more than 20 grand. There are a certain repayment conditions that come into effect if you have an IVA. For example, if you have an IVA and stick to the agreement you’ll get protection from further legal action by your creditors. This also means that some of your debt will be written off.
How to get an Individual Voluntary Arrangement (IVA)?
Usually, one uses an insolvency practitioner to get an IVA.
The next step is the insolvency practitioner working out the payment details. This means the details of what you can afford to repay and how long the IVA lasts. Information about your financial situation as well as assets, debts, income and creditors will be required by the insolvency practitioner. Be sure to get quotes from a few organizations and pick the one most suitable to you. Only a few organizations like Solution2Debt will customize their plan to suit your needs, so pick wisely.
Creditors and the IVA?
For your IVA to be approved, at least 75% of the value of creditors who vote at the meeting of creditors need to vote in favor of your IVA proposal. However, as long as your IVA proposal contains your best offer, most creditors will look favorably on your proposal. Modifications are changes your creditors can ask to be made to your IVA proposal. You can have ample time to think about these modifications. If you agree to the modifications, your IVA will be approved on the day of the meeting of creditors.
Your IVA can be cancelled by the insolvency practitioner if you do not keep up your repayments. The insolvency practitioner can make you bankrupt. You may still be able to keep your business running, if you have one. But it’s better not to risk anything.
Is an IVA right for me?
Our expert debt advice can tell you if an IVA is suitable for you. Contact us here.