IVA: Everything You Need To Know

IVA-an Individual Voluntary Arrangement, is a legal document or an agreement that acts between you and all of your unsecured creditors. It’s a formal and legal-binding arrangement that prevents your creditors from taking legal action against you.

IVA is a way of dealing with your debts, so you need not struggle to prioritize the payment of your debts. In addition, it lets you free from the financial burden of juggling multiple payments to your creditors. When you enter into an IVA, you are supposed to make a monthly payment to your creditors based on your household income and expenditure over a definite period.

If you have decided to pursue an IVA, you will never regret your decision, and you get to pay off the debts at an affordable rate. If you want to know everything about IVA that you need to know, this blog is for you:- 

  • How can you set up IVA?

If you want to set to an IVA for you, here are the five steps to help you:-

Step1:- Contact a free and independent debt advice organization to confirm the IVA is suitable for you.

Step2:- Get an Insolvency practitioner to help you prepare your IVA and to send it to your creditors.

Step3:- If you want to get an IVA, provide details to insolvency practitioners about your assets, income, expenses, including household bills and food bills, your debts, including interests and charges & a full list of your creditors.

Step4: When you provide details to IP, he will arrange a meeting with your creditors to represent you and your IVA. 

Step5:- Insolvency practitioner will act as your IVA supervisor and make efforts to manage & distribute your payments to your creditors.

  • How does IVA work?

Generally, IVA includes an authorized debt specialist (Insolvency Practitioner) that helps you to pay all or part of your debts or enables you to make your regular payments. In addition, IP shares money out between your creditors as agreed in your IVA.

Your IVA usually ends when the amount you have agreed upon has been repaid. There is no maximum or minimum level of repayments.

  • Advantages of IVA:-
  1. It is the easiest way to avoid bankruptcy proceedings.

       2.) If you want to get rid of property repossession and protect your assets, you can seek IVA    help.

      3.) You can make a fixed, reliable, and affordable payment at one time.

     4.) It helps you to get rid of your debts. 

    5.) It enables you to make the monthly payments on time and disallow your creditors to take   any legal action against you or harass you for payment.

   6.) You can get rid of stress and anxiety if you sign up for IVA.

   7.) Through the IVA, you can save money by having a fixed interest on the current debt.

    8.) It helps to provide you with a better quality of life in which you can carry on with your monthly expenses and need not worry about the debt amount.

  • Disadvantages of IVA:-

Have you known the incredible advantages of IVA? If yes, now it’s time to get familiar with its disadvantages as well:-

  1. IVA does not serve for all kinds of debts such as fines imposed by the courts or the legal penalties.
  1. In case of the failure of IVA, your creditor will start hovering over your head with the same interest rate and demand the petition for your bankruptcy.
  2. You will have to pay extra money unwillingly during the proceeding of the IVA.

      4.) If IVA fails to help you, you might have to sell your valuable assets to pay off the amount of your debt.

     5.) If you are a youngster and want to register for IVA, you are not permitted.

     6.) IVA affects the level of employment and your credit rating.

    Hopefully, if you are sinking into debt, IVA will be proved the most reliable option.

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