What Is An IVA?
For people looking to steer clear of bankruptcy, an Individual Voluntary Arrangement (IVA) is a substitute; it is an agreement with the creditors of an individual looking to maintain paying their debts but, due to a change in their financial situation, can no longer make the initially agreed repayments.
The circumstances of the individual’s are considered in making the agreement and are flexible based on a mix of capital, income and other payments. For an IVA to go ahead, creditors will make a decision via a vote which must see over 75% agreement.
An IVA, although not mutually exclusive, can be used as an alternative to bankruptcy. A person can apply for an IVA which requires approval and a Court annulment of the bankruptcy order if they have filed for and been made bankrupt.
The advantages and disadvantages of an IVA are dependant on the circumstances of the individual debtor, professional advice is usually sought to decide upon the best option. An IVA will not automatically restrict the debtor from obtaining credit but a proposal usually will.
Unlike with bankruptcy, an individual will not have to reveal anything about an IVA, but some lenders may ask. An IVA will not be viewed in the same light as bankruptcy by creditors as it shows a dedication to repayment, however the existence of an IVA in the first place generally suggests poor credit on behalf of the debtor and both will stay on the individual’s credit file for 6 years.
A creditor is restricted by the decision to approve an IVA proposal and cannot take any enforcement action to retrieve the debt. Unlike bankruptcy, an IVA proposal doesn’t usually include any property of a debtor but in some cases the creditor may recommend a re-mortgage or propose a degree of income based assistance because of the debtor’s equitable interest in the property.
Do you have a problems repaying your debt, then visit The Debt Advisor to see if you could qualify for anIndividual Voluntary Agreement.
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Tags: agreement, bank, bankrupt, contract, creditors, debt, debtors, IVA, Loans, Money, Mortgage, Mortgages, repayments
