The truth about IVA

IVA or Individual Voluntary Arrangement is born with the Insolvency Act 1986. This is a legally binding agreement, which involves you, your creditors and a Licensed Insolvency Practitioner. It is a compromise of how you plan to repay all your debt rather than go bankrupt. An IVA is a chance to wipe off part of your debt and stop all further compounding of interest. IVAs usually last for 5 years.

IVA is not for everyone that has debts, those that have debts higher than 15,000 £ are the only ones approved for this type of agreement. This is also done with the help of Licensed Insolvency Practitioners, they will stand as your advisers on how to proceed with the agreement. The practitioners will then talk to your creditors on your proposed plan, then if the creditors approve, you will be entered into the agreement.

Some of the great features of IVA as oppose to bankruptcy is the protection of your professional life and the privacy. Those that declare bankruptcy are relieved and are refrained from certain positions, like accountants, magistrates, doctors, and even from public office. There is also no public statement of your financial status.

Other gain from IVA includes an exact time frame as to when you will be debt free. You would also be able to wipe off remaining debts after the agreed fixed period. Another advantage protects your properties, the agreement can be specifically modified to help you keep your home albeit the agreement. If you are in such an agreement and you are regularly paying your monthly terms, you are protected from any court orders.

While under an IVA, there are also some restrictions but not as exacting as that during bankruptcy. Monthly payments will also need to be at least 200 £, or more depending on some factors. These factors include your utility bills, food expenses and daily spending. You would only be allowed with exact amount to sustain you during the agreement period. This means curtailing your other luxurious expenses. You should also take note that IVAs can also stir your credit status. You are also restricted to get ay unsecured loans.

IVAs is a chance to redeem you from debt, but before you enter into the agreement be sure that you are serious in paying up your debts, remember that this is already a legal settlement. And that after IVA, there can already be no more viable option.

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