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Down with Debt
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Are you drowning in debt? Unable to pay your bills on time or at all? Getting angry telephone calls and letters? Worried over the future?
Learn how to cope, to regain solvency and control your personal or business finances
IVA (Individual Voluntary Arrangement)
An IVA is an alternative to bankruptcy, in simple terms it is a binding legal agreement supervised by an insolvency practitioner and approved by the government whereby you pay a fixed sum each monthly for a period of time usually around 5 years in settlement of your debts. http://www.ipa.uk.com
At least 75% of your creditors must agree to the arrangement, and you will be required to pay a fee to the insolvency practitioner.
Advantages of a IVA
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It is an alternative to bankruptcy which puts you in control
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It saves money in that your available income over a 5 or 6 year period or so period is shared among creditors.
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It is a better alternative to borrowing money over greater periods 10,15 years to repay a debt of equal value.
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If you maintain the month payments for the term all your debts are treated as paid in full, even if these represent 50% (more or less) than the original debt.
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More ideal for larger debts of £15,000 or more, some insolvency practitioners may set minimum limits of debt.
Disadvantages of a IVA
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If you fail to keep the payments up the agreement can terminate and creditors pursue other means of recovery which may include bankruptcy.
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You are required to pay the insolvency practitioner a fee usually upfront, to discuss, set up, and register the agreement.
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75% or more of your creditors must agree to the arrangement
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As a legal document your credit status reflects the existence of an IVA and you will be unlikely to get credit during its existence (and potentially foolish to attempt to do so)
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If you have irregular income are unemployed or retired a IVA may either not suit you or be accepted by your creditors, a well paid secure full time job or sound self employment is much preferred.
It is a fine line between a debtor being able to organise a debt management plan and taking out an IVA. The total debt value is a deciding factor as is a regular income to fund the arrangement
For more detailed information see the web sites below;
Useful web sites
http://www.iva-info-uk.org.uk/
http://www.financialhelpline.co.uk/
IPA (Insolvency Practitioners Association) is a Recognised Professional Body whose purpose is to inform and regulate insolvency practitioners within the UK www.ipa.uk.com/