The Individual Voluntary Arrangement Explained
During these tough economic times, many people are finding themselves having trouble managing their bills and finances. This can be due to many different factors such as loss of work, increased interest rates or even unexpected medical costs. When the financial situation seems really dire, it can be tempting to file for bankruptcy to essentially start again. However, this is not always the best choice and can often lead to further financial woes and low credit scores. Instead, you may want to look into alternative options to bankruptcy such as individual voluntary arrangements (IVA).
What is an IVA?
An individual voluntary arrangement (IVA) is a binding agreement with your creditors to pay back some or all of the debt owed. The process begins with a formal proposal to the creditors. Then, with the help of an insolvency practitioner you will need to apply to the court. Once an agreement has been reached with the creditors, it will be binding on them.
What does it cost?
How much you pay for an IVA depends on your insolvency practitioner. Make sure you discuss the fee upfront before you ask them to represent you. Practitioners are generally accountants and sometimes solicitors. They will charge a fee that is similar to other types of work within the profession. When it comes to your payments, that is something that will be discussed with your creditors to be agreed upon. The terms will include how much you need to pay back, who you make the payments to and for how long.
What are the benefits?
There are many benefits of applying for an IVA over bankruptcy. The first advantage is that you have the ability to negotiate with your creditors over the management of your assets. For example, it is likely that you will be able to keep your home in the agreement, whereas with bankruptcy you have no say and the likelihood of your house being repossessed is much higher. Another advantage is that you avoid the restrictions that apply to bankrupt. For example, bankruptcy will generally dissolve a partnership and prevent the debtor from being the director of a company. It also restricts the debtor from obtaining credit, whereas an IVA places no restrictions on new credit. Finally, with bankruptcy you are still responsible for fees and expenses associated with your debt and the process of claiming the bankruptcy, making it possible for the overall expense to be much higher.
If you are finding yourself in financial trouble, take a look at starting the individual voluntary arrangement process today before it's too late. It is a great way to get yourself back on track and prevent total financial ruin. With an IVA, you will be able to get your feet back on the ground while keeping your dignity, as there is a big stigma attached to bankruptcy. You will also be able to have more control over your assets and will be able to start rebuilding your credit.
What is an IVA?
An individual voluntary arrangement (IVA) is a binding agreement with your creditors to pay back some or all of the debt owed. The process begins with a formal proposal to the creditors. Then, with the help of an insolvency practitioner you will need to apply to the court. Once an agreement has been reached with the creditors, it will be binding on them.
What does it cost?
How much you pay for an IVA depends on your insolvency practitioner. Make sure you discuss the fee upfront before you ask them to represent you. Practitioners are generally accountants and sometimes solicitors. They will charge a fee that is similar to other types of work within the profession. When it comes to your payments, that is something that will be discussed with your creditors to be agreed upon. The terms will include how much you need to pay back, who you make the payments to and for how long.
What are the benefits?
There are many benefits of applying for an IVA over bankruptcy. The first advantage is that you have the ability to negotiate with your creditors over the management of your assets. For example, it is likely that you will be able to keep your home in the agreement, whereas with bankruptcy you have no say and the likelihood of your house being repossessed is much higher. Another advantage is that you avoid the restrictions that apply to bankrupt. For example, bankruptcy will generally dissolve a partnership and prevent the debtor from being the director of a company. It also restricts the debtor from obtaining credit, whereas an IVA places no restrictions on new credit. Finally, with bankruptcy you are still responsible for fees and expenses associated with your debt and the process of claiming the bankruptcy, making it possible for the overall expense to be much higher.
If you are finding yourself in financial trouble, take a look at starting the individual voluntary arrangement process today before it's too late. It is a great way to get yourself back on track and prevent total financial ruin. With an IVA, you will be able to get your feet back on the ground while keeping your dignity, as there is a big stigma attached to bankruptcy. You will also be able to have more control over your assets and will be able to start rebuilding your credit.
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