If you ever encounter a serious financial crisis in your life like, you are under heavy amount of debt, normally 15,000 USD or more, the best thing to do would be opting for an IVA (Individual Voluntary Arrangement); it will help you lead to a debt-free life again.
Since a bankruptcy could result in loss of assets, that is one of the main drawbacks of bankruptcy, IVAs are normally known to be a better substitute since the usual drawbacks a bankruptcy entails are not applicable. On the other hand, considering an IVA is a financial decision, and one needs to be fully aware of what is it all about before opting for it.
You can apply for an IVA only after you have consulted a debt adviser about your complete financial circumstances. This is done to ensure that no other better debt solution is out there, keeping your financial situation in mind. If the debt adviser thinks that an IVA is the perfect solution after the meeting, they consult with you and come up with a proposal to tell all the creditors exactly how much they should be expecting, in case of approval of the IVA.
You can then submit this proposal to all the creditors so that they get some time to go through it. After reviewing the proposal, the creditors will get a chance to vote in the favour of or against the IVA being approved. For your request to be approved, according to the value of the debt, you need to have 75% of the total voting creditors to be in the favour of this process.
If this entire process works in a smooth manner, you will initiate the actual IVA procedures. You will be paying a fixed amount of money every month to the insolvency practitioner who then pays the creditors dividends on this amount, set according to the IVA proposal. This process usually lasts for five years.
You as well as all the creditors would be limited under this legal agreement, for the duration of the term of the contract. The creditors will have no right to initiate any kind of legal action against you, which would only be possible if the terms of the contract are violated. The interest amount on your debt will be frozen, unless the agreed terms state otherwise, for the complete duration of the contract.
If you happen to own a house, you might be expected to give out a fixed portion of equity of your house ownership. This will be done in the 54th month of your payments and will be divided amongst the creditors according to the share of debt you hold against them.
After you have made your last payment in the 60th month, the process would be complete. Any remaining balance of debt would be waived off legally and you will be completely debt free. Your credit history will hold the record for the IVA for one year after it was completed. - 29866
Since a bankruptcy could result in loss of assets, that is one of the main drawbacks of bankruptcy, IVAs are normally known to be a better substitute since the usual drawbacks a bankruptcy entails are not applicable. On the other hand, considering an IVA is a financial decision, and one needs to be fully aware of what is it all about before opting for it.
You can apply for an IVA only after you have consulted a debt adviser about your complete financial circumstances. This is done to ensure that no other better debt solution is out there, keeping your financial situation in mind. If the debt adviser thinks that an IVA is the perfect solution after the meeting, they consult with you and come up with a proposal to tell all the creditors exactly how much they should be expecting, in case of approval of the IVA.
You can then submit this proposal to all the creditors so that they get some time to go through it. After reviewing the proposal, the creditors will get a chance to vote in the favour of or against the IVA being approved. For your request to be approved, according to the value of the debt, you need to have 75% of the total voting creditors to be in the favour of this process.
If this entire process works in a smooth manner, you will initiate the actual IVA procedures. You will be paying a fixed amount of money every month to the insolvency practitioner who then pays the creditors dividends on this amount, set according to the IVA proposal. This process usually lasts for five years.
You as well as all the creditors would be limited under this legal agreement, for the duration of the term of the contract. The creditors will have no right to initiate any kind of legal action against you, which would only be possible if the terms of the contract are violated. The interest amount on your debt will be frozen, unless the agreed terms state otherwise, for the complete duration of the contract.
If you happen to own a house, you might be expected to give out a fixed portion of equity of your house ownership. This will be done in the 54th month of your payments and will be divided amongst the creditors according to the share of debt you hold against them.
After you have made your last payment in the 60th month, the process would be complete. Any remaining balance of debt would be waived off legally and you will be completely debt free. Your credit history will hold the record for the IVA for one year after it was completed. - 29866
About the Author:
Edward Woodwards is a financial consultant. You can take his advice on individual voluntary arrangement on his recommended site http://www.iva.org.uk/iva-solutions.html
