subject: Outline to IVA Debt Solution [print this page] Outline to IVA Debt Solution Outline to IVA Debt Solution
With the recent credit crunch hitting the whole country hard, many people have been struggling with mounting debts that spiral into thousands of pounds. The level of debt can become increasingly difficult to manage and this has lead to an increase in IVA Debt Solutions being arranged. What exactly is an IVA though and how can it help people to cope with the amounts that they owe?
An Individual Voluntary Arrangement (IVA) is a formal repayment agreement between a debtor (person owing money) and their creditors (the people who are owed money). They are becoming more and more common as people try to get themselves out of the vicious circle of debt repayments.
An IVA is a legally binding agreement and allows a debtor to make reduced monthly payments to their unsecured creditors in order to pay off a percentage of what they owe for the duration of the agreement. The normal time period for which the solution is set up is 5 years.
During the IVA, the creditors are legally bound to freeze the interest on any outstanding debts and to cease adding late payment charges to the debtor's account(s).
Also the creditors are forbidden from contacting the debtor with regard to the outstanding debts, whether by mail, telephone, fax or email. Any correspondence must be passed through the appointed Insolvency Practitioner's office under the terms of the Individual Voluntary Arrangement.
Once an IVA has been successfully completed any outstanding balances must be written off by the creditors, in many cases as much as 75%! Leaving the debtor debt free.
The size of the monthly repayments to the IVA are calculated with the help of the debtor providing the relevant documentation and are based on what the debtor can realistically afford throughout the term of the IVA.
To qualify for an IVA the following minimum requirements need to be met.
Debts must be over 15,000
3 or more different named creditors
Debtors must be in receipt of a regular income which is not wholly dependant on benefits
If you meet the criteria mentioned then you could significantly benefit from arranging an IVA Debt Solution so you should take some time to look into your available options.
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