One of the effective ways of dealing with you debts is called as an Individual Voluntary Arrangement (IVA). It is actually an agreement with your creditor for making your monthly repayment more affordable. When an individual goes for IVA debt management program it will help him/her as his repayments will be tailored according to the current financial status he/she possess. Moreover, the money you have to pay back will be paid off over a specific period of time.
Now the question is how you can be so certain that the help taken from IVA will be right for you. When an individual seeks IVA debt management program’s advice he/she will find out that it is yet another option for you to manage your debts. The type of repayment program to opt will depend on you own financial status. It will work best for an individual who has got sufficient amount of money every month for repayment against what you owe and/or any asset that could be used.
Now, to qualify for an IVA there are some other factors that need to be taken into account before availing it. First of all, you must have three outstanding debts that total £15,000 or more. Secondly, you should owe these amounts to two or more different creditors. Thirdly, one should be in a condition to pay around 20 pence for every £1 you owe.
Individual Voluntary Arrangement is legal bindings in which you are agreeing to pay an amount off your debt with in a specific period. If there would be any unpaid amounts that were included in IVA they will be written at the very end of that period. It depends on the individual’s priorities and circumstances that he/she may pay in monthly installments for a specified number of years or can include a lump sum repayment.
Another question is that what types of debts are included in Individual Voluntary Arrangement?
Individual Voluntary Arrangement often considers unsecured debts that include: credit cards, catalogs,personal loans, overdrafts and store cards etc. It is possible that some priority debts can also be included in an IVA like council tax arrears, fuel debts and taxes but it would be dependent on the agreement by the creditor.
There are some debts which cannot be included in this very arrangement. They include mortgage and secured loan arrears,maintenance or maintenance arrears,student loans, Child Support Agency arrears,rent arrears andmagistrates’ court fines etc. This should also be kept in mind that when you will enter into anIndividual Voluntary Arrangement you will have to disclose all the details related to your assets and possessions by law.
These payment agreements in which you are entering you have to set up by an Insolvency Practitioner(IP) who will usually be qualified accountant or solicitor. IP has the authority to set up an Individual Voluntary Arrangement on the client’s behalf and will apply in the courts for temporary order. This is helpful because it will stop your creditors to take you to the courts in the meantime.
A number of benefits are also provided byIndividual Voluntary Arrangements. Firstly, your repayments will be continued till a specified agreed date and usually you will be ending up at repaying less than you owe. Moreover, you would not be having the same limitations as you would be having in case if you are declared bankrupt. Another advantage of IVA is that your property or house etc. will not be directly/automatically seized from you but you need to agree to re-mortgage for paying some of the debts.
So, Individual Voluntary Agreement is no doubt a very helpful as well as convenient source of the individuals for management of their debt however, everyone needs to consider the pros and cons and one’s own capacity etc. in order to avoid future issues and stress. As the circumstances differ from person to person so one should not just opt IVA or any other such agreement because its attractive and it looks good but he have to dig out what would be its advantages and disadvantages in the longer run and how will he manage all such agreements.