Introduction: What is an IVA?
An individual voluntary arrangement (IVA) is a formal agreement between you and your creditors which allows you to repay some or all of what you owe over a period of time. It’s an agreement that’s legally binding on your creditors. In order to qualify for an IVA, one has to be able to prove that they cannot repay their debt over a set period of time. You set out how much you think you can afford to pay each month in order to clear what you owe over a period of up to 5 years.
IVAs are most commonly used by homeowners with large mortgages who owe more on their house than it is worth. This is because they might want to keep the house they live in, even if it has negative equity or no value at all.
This type of agreement would allow them to sell off other assets that are not protected by law in order to pay off the mortgage without losing the home they live in.
In some cases, an IVA can be used as a way of avoiding bankruptcy.
IVAs are managed by an independent licensed insolvency practitioner who will handle all communication with your creditors on your behalf. The IVA trustee or company will also provide you with counseling and support.
IVA vs Bankruptcy – Which One is the Better Option?
The first option is to file for an Individual Voluntary Arrangement (IVA), which is a way of settling debts by agreeing a repayment schedule over a fixed period. The second option is to file for bankruptcy, which will stop creditors from taking any further legal action against you and put an end to your debt. The key difference between the two options is that filing for bankruptcy means you will give up all your assets, including your property as well as any savings or other investments as well as furniture and possessions.
Individual Voluntary Arrangements are also known as IVA’s. This is a way of settling debts by agreeing a repayment schedule over a fixed period. Bankruptcy stops creditors from taking any further legal action against you and puts an end to your debt. The key difference between
Pros and Cons of an IVA – What Makes it So Good?
* It offers protection from creditors and stops legal proceedings against you;
* It avoids any negative impact on your credit score;
* You have more control over your assets than you would have if you were subject to bankruptcy order;
*It helps people to avoid bankruptcy.
*It can offer better terms than bankruptcy;
*It can provide partial repayment while preserving property;
*It allows some people to retain their domestic residence while paying off debts.
*It’s a good opportunity for people who have been unable to make payments on their debts because of financial hardship or unemployment.
*It can stop creditor harassment and make it easier for people not in arrears with their payments.
*The debtor gets back control of his/her finances and can rebuild creditworthiness sooner as part of the plan’s repayment terms.
-The process can take up to three years in some cases;
-There are strict eligibility requirements which are not easy to meet; it depends on
Getting an IVA is not just about filling out paperwork, but also understanding the process and what it means for your finances. You need to know the ins and outs of this before you take the plunge.