IVA Process
Individual voluntary arrangements (or an IVA) are a good way to become debt free in a relatively short period of time. They have many advantages compared to other methods like bankruptcy for example. Before one decides upon an individual voluntary arrangement, they should be aware of the whole process.
First of all, getting an IVA is a good decision for people who are overwhelmed with debt, and they find themselves in the situation that they simply cannot repay their debts. There are several solutions to solve this very important matter, but getting an IVA is one of the best! With its help, people can make an arrangement with their creditors, so it is possible that they will repay only a certain percentage of their debts. When they repaid the agreed amount, the rest of the debts is written off, so people can become debt free easier with an IVA.
There are a few questions which arise in everyone’s mind: what are the steps to follow, what is the entire process, how long does it take? This article will try to answer all these questions, and possibly offer explanations on other important matters part of the IVA process.
The process actually starts when you realize that you cannot cope with your monthly payments anymore. You realize that the situation is serious and you must do something, if that something is an IVA, than you will have to find an insolvency practitioner. Insolvency practitioners are specialized people who deal with insolvency cases and individual voluntary arrangements.
It is important to find a qualified person, because the role of an insolvency practitioner is very important during the whole IVA process. You will have to have a serious talk with the insolvency practitioner; you will have to inform him about your current financial situation, the exact amount of your debts, and the name of your different creditors. He might require some documents which prove the correctness of the information: so you might have to take with you bank statements or something which proves your exact financial situation.
The next step is to come up with a repayment plan. You will have to work out such a plan with the insolvency practitioner, which is the main reason it was so important to present your financial situation in great detail. This plan will be different from your monthly payments, since you have to calculate the exact amount of your income, and then you have to agree upon an amount you can afford to repay your debts. This means that you will pay the exact same amount each month, and you will be able to live off the remaining income. That is the main reason an IVA is so successful: people can afford the monthly payments! After discussing all this, the insolvency practitioner will put the whole plan on paper and he will organize a creditor’s meeting. Every one of your creditors is invited to this meeting, and the insolvency practitioner will present them the repayment plan. Creditors might accept or decline the plan. In case too many of them decline it, you can change a few things, then organize a meeting again and discuss on the new terms. When it comes to accepting or declining a repayment plan it is important to note that the number of creditors is irrelevant, the important thing is that creditors, making up 75% of your debt accept the repayment plan, than you passed the hard part. If the plan is not accepted, the insolvency practitioner will come up with another plan, until finally the creditors will support your proposal.
As a last step, the insolvency practitioner makes an application to the court, and in a short time the court will make him the ‘oversee’ of the whole procedure. From that time on he will be responsible regarding all the issues of your IVA. From that time you will not have to stay in contact with your creditors, all you have to do is to send your monthly payments (via check, bank transfer or other ways) to the insolvency practitioner, and he will distribute the money between your creditors in the agreed percentage. Whenever a problem arises regarding the IVA both you and your creditors have to turn to the insolvency practitioner, he is the only one who keeps in touch with the debtor and the creditors. If you make your payments in time each month, you can get debt-free in as soon as five years, which is the common term of an IVA. If everything was all right during this period, you managed to repay the agreed percentage of your debts (which were reduced by 40 to 60 % usually), and finally you become debt free. It is important to note that creditors can start legal action against you in case you are frequently late with your monthly payments, and if that is the case the IVA becomes void and you will have to support all the consequences.
Getting an individual voluntary arrangement is a very good thing to do, it helps people who cannot afford to repay their debts become debt free. It is not a public matter, like bankruptcy, so the whole process can be done without involving your family or friends. An IVA represents quite an easy way to become debt-free in a short period of time, and more importantly without making great effort; since you will be able to afford the monthly payment. It is only up to you, if you really want to become debt-free quickly, then be sure that an IVA is one of the best available options you can choose from!