Is an IVA the Best Solution to Get Out of Debt?
An IVA stands for individual voluntary arrangements.
It is tailored as an effective alternative to bankruptcy as there is lesser risk to your assets such as your home or car.
It is similar to bankruptcy in the way that it will get you out of debt but without having the stigma and it won't affect your credit rating as much as filing for bankruptcy would.
By definition, IVA's are agreements that are facilitated by a county court between a debtor and a creditor.
Under these agreements, a debtor is required to pay off a certain amount of his debts outstanding in a specified period of time (Usually 5 years).
Despite being similar to bankruptcy, its differences make it an ideal choice for individuals that are on the brink of insolvency and are struggling to make the repayments on their debts each month.
Reasons why you should get an IVA Firstly, individual voluntary arrangements are less complicated than bankruptcy proceedings.
Once an automatic stay has been enforced upon your creditors, your insolvency practitioner will arrange a 'meeting' with your creditors to decide whether the IVA can be passed.
These meetings very rarely actually take place in the physical sense anymore, they are done over the phone and fax.
If an IVA is passed a suitable repayment amount will be set for you over a set term which is usually 60 months (5 years).
Second, you get to choose your own insolvency partner that will facilitate the IVA proceedings.
This is one main difference with a bankruptcy proceeding, in which most of the times the Court appoints an Insolvency Practitioner to do that on your behalf.
With an IVA, you can choose someone you are confident with about the process and that will help you with the proceedings.
In other words, you get to work with someone or a company of your choice.
Thirdly, in an individual voluntary arrangement you can have up to 75% of your debts written off.
That is because, in an IVA, you are required to pay off a minimum of 25% of the debt.
So depending on how much you owe and how much you can afford as a monthly repayment, you can be totally debt free within 5 years.
Things to watch out for when entering into an IVA Just because an IVA is advantageous to everyone, not all situations are ideal for an IVA.
For example, if you cannot guarantee a steady flow of income for the next 5 years, then an IVA is simply not for you since you will not be able to afford the high installment amounts over the period specified in your agreement with your creditors.
If you fall behind with payments your situation could worsen and you may end up having to file for bankruptcy.
It is tailored as an effective alternative to bankruptcy as there is lesser risk to your assets such as your home or car.
It is similar to bankruptcy in the way that it will get you out of debt but without having the stigma and it won't affect your credit rating as much as filing for bankruptcy would.
By definition, IVA's are agreements that are facilitated by a county court between a debtor and a creditor.
Under these agreements, a debtor is required to pay off a certain amount of his debts outstanding in a specified period of time (Usually 5 years).
Despite being similar to bankruptcy, its differences make it an ideal choice for individuals that are on the brink of insolvency and are struggling to make the repayments on their debts each month.
Reasons why you should get an IVA Firstly, individual voluntary arrangements are less complicated than bankruptcy proceedings.
Once an automatic stay has been enforced upon your creditors, your insolvency practitioner will arrange a 'meeting' with your creditors to decide whether the IVA can be passed.
These meetings very rarely actually take place in the physical sense anymore, they are done over the phone and fax.
If an IVA is passed a suitable repayment amount will be set for you over a set term which is usually 60 months (5 years).
Second, you get to choose your own insolvency partner that will facilitate the IVA proceedings.
This is one main difference with a bankruptcy proceeding, in which most of the times the Court appoints an Insolvency Practitioner to do that on your behalf.
With an IVA, you can choose someone you are confident with about the process and that will help you with the proceedings.
In other words, you get to work with someone or a company of your choice.
Thirdly, in an individual voluntary arrangement you can have up to 75% of your debts written off.
That is because, in an IVA, you are required to pay off a minimum of 25% of the debt.
So depending on how much you owe and how much you can afford as a monthly repayment, you can be totally debt free within 5 years.
Things to watch out for when entering into an IVA Just because an IVA is advantageous to everyone, not all situations are ideal for an IVA.
For example, if you cannot guarantee a steady flow of income for the next 5 years, then an IVA is simply not for you since you will not be able to afford the high installment amounts over the period specified in your agreement with your creditors.
If you fall behind with payments your situation could worsen and you may end up having to file for bankruptcy.
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