There are basically 5 types of IVA programs. No matter which one is suiting your profile, you need to know that an IVA’ is a particularly good debt solution, for individuals who must deal with unsecured debt.
Types of IVAs
- IVA program called SINGLE IVA – this is a choice for you if you are the sole responsible for repaying your debts; all of the debts that you request the IVA for, are in your name. Through Single IVA you must have a minimum debt accumulated (~ £15,000), and you must make a good proof of a stable income (as most of the times your monthly required payment will be set at £200). Moreover, the debt is of unsecured type, and you own at least 2 or 3 different creditors. It is important to know, that even if you have taken out a loan on a joint agreement (with your partner for example), but only you are in the position now to make the repayments, this scenario can also be included into a Single IVA option.
- Assisted type of IVA – this includes the scenario when all the debts are in your name, but you could also have an extra person helping you with your payments for the IVA. You always have to carefully read the terms and conditions, and talk to your IP about all the possible options. An assisted IVA can really help you, if you can’t make the payments on your own, given the fact you simply cannot afford. But if someone else joins forces and is willing to help you out, than you can become debt free more easily and quickly.
- Joint IVA – is the perfect solution, if you wish to get rid of debts jointly. For example, you have taken out unsecured loans from creditors on a jointly basis (husband and wife, partners, etc.). Now, when you need to get out of your accumulated debts, you can do it by applying for a Joint IVA.
- Full and Final settlement IVA, or Lump Sum IVA- this is the quickest and less painful solution of getting rid of your accumulated unsecured debts. In a matter of a few months you can call yourself a debt free person. Remember that it is a legally binding process, so you will be protected all through the program. A full and final settlement supposes that you pay off your debts with one single lump sum, and have them immediately removed from within financial records. You may have some savings, which can be used for repaying your accumulated debts, or you might even think of the option of equity release. The good thing is that creditors will agree to cut off a great percentage of your debts, given the fact you are offering them a lump sum. This lump sum represents most of the times 50%, 60%, 75% of your overall debt. Certainly it depends on the good will of your creditor, how much he will agree to erase from your overall debt. Some will totally wipe off late payment fees, others will reduce interest payments, so that the overall outstanding debt becomes automatically reduced and you can pay off a larger portion of your loan principal, instead of paying only fees and charges.
- IVA programs intended for businessmen & self-employed people – Self employed people seem to be a different category always, especially when it comes to loans and financial instruments. This is so mainly because self-employed individuals cannot make proof of a stable income most of the times, so it would make it difficult for lenders to trust them with the repayments schedule. But there is a specifically designed IVA solution for sole traders and self-employed people as well.
Always give all the necessary information to your Insolvency Practitioner when you are about to take on IVA as an option, because this is the only way you will truly be able to find that product which best suits your needs. Statistically, in the UK the number of individuals asking for IVA’s is in a continuous rise, which means that more and more people trust this type of agreement as the perfect solution for their debt problems.
