This article helps you to understanding the legal process by which your unsecured creditors cannot
pursue you for payment of your debts outside of the agreement.
In order to qualify for an Individual Voluntary Arrangement (IVA) you
must be a resident of the UK, excluding Scotland, however, it is also possible
for residents of England, Wales and Northern Ireland who are either working or
living abroad to apply.
Most IVAs are made up of debts owed to credit card companies, store
cards and personal loans which the debtor is unable to repay. The idea of an
IVAs is not to avoid having to repay outstanding debts which have accumulated,
but rather consolidate them and have their repayment managed for you by a
reputable company who specialise in debt management and IVAs.
IVAs are for those who have debts which are a minimum of £15,000, there
is no maximum limit, and offer for some people a much preferable solution to
bankruptcy. Creditors generally expect to have at least thirty percent of what
is owed returned to them through an IVA, in exceptional circumstances they may
be willing to accept twenty five percent.Â
The IVA repayments will be set at a level which enables the debtor to be
able to meet the repayments while still having sufficient money to live a
reasonable lifestyle, it is therefore part of the criteria when applying for an
IVA to have a stable monthly income to be able to keep up the repayments and
honour the IVA agreement. If someone defaults on their payments the company who
is managing the IVA may well file for bankruptcy of the debtor. Debtors should
be fully aware of the terms and commitment required prior to signing any IVAs.
Setting up an IVA usually takes between four and six weeks depending on
how quickly the debtor can provide information and evidence for the Insolvency
Practitioner on which to build the case. Initially the debtor will have either
a face to face or telephone consultation with the Practitioner to discuss the
situation and confirm that an IVA is the best approach and way to deal with their
particular debt situation.
Once an IVA has been decided to be applied for the Insolvency
practitioner will require all information relating to household income and
expenditure, including all debts and the names of all of the creditors. IVA can
be made for an individual or joint (couple) living within the same household,
marriage it is not a requirement for a joint IVA. The Insolvency practitioner
will then spend time verifying that all of the information is valid and that
they have been told the whole truth. This is to show the creditors that the
amount to be repaid each month is the full amount that the individual or couple
can truly afford. The Practitioner equally makes certain that the debtors can
realistically afford the repayments and that they have the means to keep
repaying for the full five years while maintaining a reasonable lifestyle.
There are several different types of IVA, although they are all very
similar there are options which may be more suitable, for example there is an
IVA which has only monthly payments over sixty months , a lump sum only IVA which is normally from re-mortgage of property
or monthly payments with a lump sum. The Insolvency Practitioner will advise as
to which one is most appropriate and suitable.
About the author
Money Solve is specialized in
effective debt management and solely dedicated company which helps people in
financial difficulty. There are various processes in order to qualify the IVA
which will ensure that you will have enough money to live on and enjoy a
reasonable lifestyle.
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