Subscribe Feed (RSS)Individual Voluntary Arrangement is the term used to describe a legally binding arrangement between you and your creditors. The fact that an IVA allows you to pay a smaller amount than the actual amount owed, and be debt free in a particular amount of time, is its major advantage. Although it can be considered instead of bankruptcy, you also have the option of going for an IVA even if you are already in a bankrupt state.
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.
An IVA is advantageous as far as the debtor and creditors are concerned. It makes it easy for you to pay your debt, and also ensures the creditors more payments than any other alternatives. Numerous organizations offering IVA services, that guide you through the process, exist today. If you are considering an IVA, there are two major options that can be attained. You can either choose a fee-based specialist, or go through a fee-free agency or charitable group, which can assist you with the process without charging any money.
Although it may sound like a perfect alternative, there are some things to consider before entering into an IVA. The first issue is to see whether you are even eligible for an IVA. You can only apply for an IVA if you have a stable income up to a certain level, and if you owe money to at least three creditors. The next step is to choose an organization which can help you set up an IVA and hire an Insolvency Practitioner. There are a number of IVA specialists in the UK, but it is important to hire a reliable person who acts in your best interest rather than going after a profit.
Assessing your financial situation and your monthly income is very important, in addition to ascertaining 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, which is not in your favour, can be taken. Therefore, you should select a plan that you can remain consistent with.
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.
Therefore, it is important to consider all aspects prior to selecting an IVA plan. Because the consequence of any default in payments can be a legal action, you have to be careful when selecting a plan, and should opt for one that you can follow through with.
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.
Tags: finance, individual voluntary arrangement, iva, iva help
