IVA or Individual Voluntary Arrangements Frequently Asked Questions
Dealing with crushing debt is not easy. No one takes a loan with the intention of defaulting on the loan. Adverse situations like a death in the family, loss of income, sickness, etc. can result in you being unable to pay off your loans. Creditors don't know this though. If you miss payments, creditors will send their recovery agents to your home to collect their money. Threatening phone calls, recovery letters and legal proceedings are common. In fact, most defaulters have to declare bankruptcy in order to stay afloat.
Stop Right There!
Before you declare a bankruptcy, it would be a good idea to look at I-V-As or Individual Voluntary Arrangements. A bankruptcy is public and it can leave an indelible mark on your credit history. Moreover, bankruptcies are public and extremely embarrassing. An I-V-A is different. With an I-V-A, you can negotiate with the creditors, stop the interest charges and other charges, and even lower your monthly repayment amounts. In a way, your lender will work with you to make the repayment process easier. This also shows the courts and the lenders that you are willing to clear your debt but with a little flexibility.
You may be a little doubtful though. Will an IVA actually help you with your debts? To assuage your doubts, we have listed the most commonly asked questions regarding Individual Voluntary Arrangements.
Take a look
FAQ#1 -- What Information do I need for this arrangement?
To set up this agreement, you will need to collect the details of your lenders and the amounts you have to pay them. You will also need to provide income proof and spending budgets. You may also have to share information about mortgages, secured debts, asset details, etc.
FAQ#2 -- Am I eligible for this process?
You must be officially insolvent with debts that far exceed your income and you should be unable to clear your debts.
FAQ#3 -- When should I get an I-V-A?
The best time to get an I-V-A is as soon as possible. By doing this, you can negotiate the amount you have to repay, and you are more likely to get a favorable result from creditors. Creditors appreciate the fact that you are willing to repay your debts and you are willing to work with them.
FAQ#4 -- Is this better than a bankruptcy?
Definitely, as you get to pay back your loans over a set period with no publicity and harassment. After this time, you are free of loans and you are debt-free. You just have to pay a single monthly payment or a lump sum as previously agreed. The agreement is private and all court proceedings are stopped. Your professional status is not affected and your fixed assets are not at risk. A licensed insolvency practitioner will help you deal with your debts and you will get a realistic repayment plan.
FAQ# 5 -- Is this process expensive?
Under the agreement, you will have to pay your debtors a set amount monthly. This will go towards paying off all your creditors and outstanding loans. Once the agreement period is over, your loans are nullified and you are debt-free. You may have to pay the insolvency expert a small fee but this depends on the agency or company you are choosing to work with.
FAQ#6 -- How do I get an I-V-A?
The process is complicated and it starts with you contacting an insolvency expert. The expert will assess your case and then decide whether the arrangement will work on your particular case. A Statement Of Affairs is then drafted and an Interim Order is applied for. After this, the SOA is circulated with creditors, the local country court, and the Insolvency Service. Creditors are invited to a meeting and if 75% of creditors agree to the terms of the proposal, the I-V-A is set up and started. Once this happens, your I-V-A is applicable on all creditors irrespective of whether they voted, did not vote or voted against the agreement. As long as you make payments, the I-V-A will protect you and you are discarded or all debt within five years of setting up the I-V-A.
As you can see, this is a great way to get debt-free as soon as possible. Do not waste time,find an insolvency expert right away to get more information about I-V-As and how they can get rid of your debt quickly.