Benefits of Individual Voluntary Arrangement
Individual voluntary arrangement also known as IVA is a debt solution for folks who want to stay clear from extreme situations like bankruptcy. It was established by the British government insolvency act in 1986. The agreement is legally obligatory and lays the path for repayment mutually agreed upon by creditors and debtors. This particular debt solution takes into account the debts of unsecured creditors. It is a pretty flexible agreement, and the amount of repayment to creditors largely depends upon factors like individual conditions of the borrower, his monthly income, assets and payment to be made to loan providers.
What are IVAs?
It is a legal contract between a borrower and his creditors to arrive at a repayment plan that is acceptable to both parties. However, there are certain conditions that need to be satisfied to avail this facility. First and foremost, you need to be a citizen of the UK. Secondly, you must have debts over and above 10,000 pounds. In case you meet these conditions, you may utilize this facility to get rid of your debts. Aside from paying off debts, you may also avert bankruptcy through this facility. Read this lesley-garrett.co.uk article to find out more about other debt solutions in the UK.
The process of seeking an IVA
A debtor can apply for IVA in pre-bankruptcy as well as post-bankruptcy period. In case the debtor is applying in post-bankruptcy, he has to make an application to the court for revocation of the bankruptcy order. If accepted, the court will appoint an Official Receiver to supervise the IVA arrangement. During pre-bankruptcy, the debtor can take the help and assistance of an insolvency practitioner (IP) to arrange a meeting of all unsecured lenders. In case at least 75 percent of lenders agree, the agreement will come into force.
Advantages of IVAs
Many folks wonder why go for an IVA when there are many other debt help solutions out there. The simple reason is IVA offers many benefits to any debtors, which are not available with other debt solutions. First of all, loan providers and creditors cannot deny the points mentioned in the agreement once they sign up the contract because the rules and regulations of the contract are legally binding on both parties of the agreement.
Secondly, the time of repayment is extended over three to five years. As a result, the debtor has enough time to clear his debts and bring his financial life back to normalcy. Another important benefit of the agreement is the debtor can write off debt once the term of repayment is over. Creditors cannot demand any outstanding dues after the time of the agreement is over.
The biggest benefit of the agreement is the amount of interest arrears is waived. Furthermore, the borrower is required to pay only the debt amount with no kind of interest. While such an agreement is undesirable to creditors, they are willing to sign up the agreement because creditors don't wish to go through the lengthy procedure of the court to recover their dues. They are prepared to get whatever they could recover from the debtor. Due to these reasons, both lenders as well as his creditors are ready to come to a settlement.
However, it is advisable to hire the services of a reputable company to get help with the IVA arrangement. Besides providing you comprehensive info and possibilities about debt settlement, an ideal company will help you to get through the hassles of debt settlement quite conveniently. The company will negotiate with your creditors on your behalf and come up with a convenient repayment plan that is acceptable to you as well as your creditors. Moreover, all hassles and regulations of the procedure are handled by the company. Therefore, it is advisable to assess reputed companies and choose the one that renders quality IVA services at pretty affordable charges.
Taking care of your debts is certainly a chore for any person. If not paid off on time, it can invite a multitude of problems including bankruptcy. The great news is you can avoid such a scenario by seeking IVA, the best debt help. Easy repayment plan, hassle free debt solution and provisions to get away with interest are a few of the highlighting benefits of this handy arrangement. Due to these amazing benefits, most of the folks, who are battling with debts, choose to hire a reputable company to get help and assistance with the individual voluntary arrangement to write off debt.