An Individual Voluntary Arrangement (IVA) is an arrangement with your creditors that allows you to pay back debts over time, in monthly instalments, while having monthly income free of debt payments. Sounds great, right?
It can be, but it’s also important to approach an IVA with the right mindset, or you might end up making rash decisions or getting overwhelmed by the process. In this article, we’ll give you some tips on how to stay sane during your IVA and prevent it from negatively impacting other areas of your life. Brace for some sound IVA advice.
An Individual Voluntary Arrangement, also known as an IVA, is a formal arrangement for dealing with debt. It’s an agreement between you and your creditors that allows you to pay back some or all of your debts through regular monthly payments without declaring bankruptcy. This can be extremely helpful if you’re struggling financially but don’t want to declare bankruptcy and will allow you time to get back on your feet again.
If you don’t apply for an IVA and go through bankruptcy, your creditors can take their losses and sue you personally. Not only that, but it will be harder for you to get a business loan or mortgage and in some cases, people will refuse to do business with you together.
It's important to know that if you apply for an IVA and it gets approved, you can't apply for another one within six years. You also can't use your home as security if it has already been used as security for the previous insolvency.
This doesn't apply if you applied for a debt relief order (DRO), which is very similar to an IVA, but with more severe restrictions—you're only allowed one DRO. A DRO lasts six years, so you'd have to wait until at least 2021 before applying again. The most dangerous point in any insolvency is when you've just filed and are waiting on your court date—it's easy to get swept up in excitement over what lies ahead.
A debt management plan, more commonly known as an Individual Voluntary Arrangement (IVA), allows you to negotiate with your creditors in a supervised process. An IVA is a way of sorting out a lot of your debts at once.
Although not necessarily popular with creditors, it can be beneficial for you because it means that all your debts are paid off over some time – usually, 2-5 years – giving you some breathing space until you’re financially stable again. An IVA isn’t just limited to unsecured debt either; if secured debt such as mortgages is involved then these will also be included in your plan.
The IP will work closely with you over your Voluntary Arrangement (VA) and you need to tell them as much information as possible about your financial affairs, so they can properly advise you on your IVA.
But some facts must be disclosed before an application for a V.A is accepted, or you could lose out on vital protection and advice. The most important of these is any previous insolvency petition that has been made against you, even if it has been dismissed or withdrawn.
Communication is key with creditors throughout your Individual Voluntary Arrangement (IVA) - you must try and establish good communication lines with them at all times. Creditors are often more willing to negotiate if they feel like they’re being treated with respect and understanding.
If you do receive a phone call or letter from a creditor, make sure you inform your credit management company before replying – after all, it’s in their best interest that your IVA succeeds!
If you can’t pay your debts as quickly as you had hoped, there may be a better option for you than bankruptcy. The new Individual Voluntary Arrangement (IVA) is designed to help those who have trouble paying their debts. Although similar to bankruptcy, IVAs are not quite as devastating. You can apply for an IVA if all of your creditors agree.
You can visit us at Monemyst for detailed and all inclusive information. Our IVA advice will cover all your doubts and guide you thoroughly.