Helpful Advice On How An Individual Voluntary Agreement Works
An individual voluntary agreement is a good option for anyone who is in a lot of
debt and is struggling to find a way to meet their payments each month. An IVA is a better alternative to bankruptcy and one that people would be urged to take. The current market has thrown more people into debt and the pressure can become too much to handle, with an IVA it gives them an option to sort out their finances.
When debts are out of control it can be a very stressful time for most, an IVA can help manage your debts rather than struggling to make ends meet each month. An IVA is a binding contract that is arranged between you and your creditor, which is supervised by a licensed Insolvency practitioner this allows you to make reduced payments against the total amount you owe. For people who are right on the edge of bankruptcy it is the ideal solution.
When looking to resolve debt between the debtor and creditor, the creditor will normally have to compromise on the amount that is owed to them. The insolvency practioners job is to look into how much the debtor can really afford each month, the debtor will need to provide their earnings and monthly outgoings, when sums have been worked out there is normally a loss for the creditor.
A contract will be drawn up between both parties once the payment plan has been sorted. When the contract has been signed by both creditor and debtor the agreement cannot be changed. It also means that the creditor cannot harass you for money or take out any legal action against you.
Not everyone will be suitable for an IVA, and there are certain things that the debtor will need to provide, for example - They would need to prove that he/she is in employment and that they will have enough money left over for all living costs.
An IVA is normally taken out over a period of 3-5 years and is available for people who have an unsecured debt of a minimum of 15,000 you will need to prove that you cannot make the monthly payments on your debt. When looking into IVA's the important thing to take into consideration is that it can effect your credit scoring and financial future long term.
Once the term of the IVA has finished, all the requirements of the IVA have been met and debts have been cleared, borrowers can find that up to 70% of their debt has been removed.
Final thoughts
IVA's have been around for the best part of 20 years and are hugely popular in all parts of the world, however an IVA is not the best solution for everyone. Contact a fee free agency or a charitable group for more advice on this matter.
by: Steve Smith
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