An Individual Voluntary Arrangement is a legally binding arrangement between you and your creditors. The main advantage of an IVA is that it allows you to pay a lower amount than your actual owe and be debt free in a specific amount of time. It can be seen as an alternative to bankruptcy, but you can opt for an IVA even if you are already bankrupt.
It is a process which can prevent the severe consequences of a bankruptcy, and is a contract that involves your creditors in addition to an Insolvency Practitioner, who acts as an intermediary between you and your creditors. The role of the practitioner is to handle payments to the creditors, so you can avoid dealing with them directly.
Beneficial to both the debtor and creditors, an IVA makes it simple for you to pay your debt, and it also ensures the creditors higher payments than other alternatives. These days, there are several organizations which provide IVA services and guide you through the process. In case you want to go for an IVA, two big options are available, including hiring a fee-based specialist, or going through a fee-free agency or charitable group, which can help you with the process for free.
Despite the fact that it may sound like an ideal alternative, there are some things to consider prior to entering into an IVA. The first to do is to see whether you are even eligible for an IVA. You can apply for an IVA on the condition that you have a steady income up to a specific level, and if you owe money to a minimum of three creditors. Then you need to pick an organization, which can help you set up an IVA and hire an Insolvency Practitioner. Many IVA specialists are present in the UK; however, hiring a reliable person, who acts in your best interest rather than going after a profit, is important.
It is very important to assess your financial situation and your monthly income, and ascertain exactly how much you can afford to pay monthly to your creditors. If you default on your payments, the IVA does not uphold, and legal action can be taken against you. Thus, the plan you select should be one that you can stick to.
The long-term consequences of an IVA should also be considered before you opt for one. An IVA can have an effect on your credit rating, even though it is a better option than bankruptcy in this regard. It can be kept private, while bankruptcy has to be announced and has a negative impact on your reputation. Another aspect to be kept in mind while making a selection is the time period of an IVA. Most IVA plans are for three to five years; however, that depends on what you choose.
Hence, consideration of all aspects before you select an IVA plan carries significance. You should carefully select a plan, with which you can follow through, since any default in payments can lead to legal action.
It is a process which can prevent the severe consequences of a bankruptcy, and is a contract that involves your creditors in addition to an Insolvency Practitioner, who acts as an intermediary between you and your creditors. The role of the practitioner is to handle payments to the creditors, so you can avoid dealing with them directly.
Beneficial to both the debtor and creditors, an IVA makes it simple for you to pay your debt, and it also ensures the creditors higher payments than other alternatives. These days, there are several organizations which provide IVA services and guide you through the process. In case you want to go for an IVA, two big options are available, including hiring a fee-based specialist, or going through a fee-free agency or charitable group, which can help you with the process for free.
Despite the fact that it may sound like an ideal alternative, there are some things to consider prior to entering into an IVA. The first to do is to see whether you are even eligible for an IVA. You can apply for an IVA on the condition that you have a steady income up to a specific level, and if you owe money to a minimum of three creditors. Then you need to pick an organization, which can help you set up an IVA and hire an Insolvency Practitioner. Many IVA specialists are present in the UK; however, hiring a reliable person, who acts in your best interest rather than going after a profit, is important.
It is very important to assess your financial situation and your monthly income, and ascertain exactly how much you can afford to pay monthly to your creditors. If you default on your payments, the IVA does not uphold, and legal action can be taken against you. Thus, the plan you select should be one that you can stick to.
The long-term consequences of an IVA should also be considered before you opt for one. An IVA can have an effect on your credit rating, even though it is a better option than bankruptcy in this regard. It can be kept private, while bankruptcy has to be announced and has a negative impact on your reputation. Another aspect to be kept in mind while making a selection is the time period of an IVA. Most IVA plans are for three to five years; however, that depends on what you choose.
Hence, consideration of all aspects before you select an IVA plan carries significance. You should carefully select a plan, with which you can follow through, since any default in payments can lead to legal action.
About the Author:
Edward Woodwards is a financial consultant. You can take iva help and solutions to debt problems. Find out more information at his recommended website http://www.iva.org.uk.
