claim now
individual voluntary arrangements (IVAs)
What is an IVA?
An IVA often appeals to debtors who wish to avoid bankruptcy and its associated penalties. It also gives the debtor more control over how assets are dealt with and increased peace of mind that no further debts will accrue.
Who should consider an IVA?
Typically, an IVA agreement will see a creditor agree to write off a proportion of the debt owed to them. In return the debtor agrees to pay a fixed proportion of their monthly income towards the debt for a period of five years.
Seeing both sides - the advantages and disadvantages of an IVA
Advantages:
- IVAs may be appropriate for anyone with a regular income who has perhaps overborrowed or overcommitted and is seeking an alternative to bankruptcy.
- An Individual voluntary arrangement (IVA) enables you to avoid bankruptcy by making a formal agreement with creditors to pay off a percentage of your debts over a fixed period.
- An IVA could help you become debt free in 5 years as well as giving you legal protection from further interest and charges being added to your debts.All interest and charges on your unsecured debts will be frozen.
- Providing you keep to the terms of your arrangement, you will be protected from any further court action by your creditors. They will also be prohibited from sending letters or telephoning you.
- Once the individual voluntary arrangement has been successfully completed, your debts are effectively written off, providing you with a fresh start.
- If you do not wish to consider bankruptcy or cannot go bankrupt because of their job, this can be an excellent option.
- All unsecured creditors will be bound by the IVA.
- Your contributions are based on your ability to pay.
- Individual Voluntary Arrangements are not published in local newspapers, unlike bankruptcy.
- It will not affect professions such as the Police Force and Armed Forces, neither will it impact on your ability to hold public office or act as a company director.
Disadvantages:
- You will be required to stick to a budget for the term of the arrangement (usually five years).
- All assets and liabilities must be declared: if you own assets of excessive value, the creditors can ask that they be released for the benefit of the creditors.
- You will be asked to release some of the equity from your property towards the last six months of the arrangement.
- Any windfalls, inheritance or bonuses must be declared to the Supervisor of the arrangement.
- All Individual Voluntary Arrangements are recorded on a public register and are likely to appear on your credit file.
Seeking an IVA is just one way of dealing with financial issues and may represent a viable solution to your debt problems.
Call us on 0800 043 1914 for free advice from experienced professionals who are ready and waiting to help.
call me back...
latest financial news
