Back To Basics - Exactly What Is An Iva?

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An Individual Voluntary Agreement, or an IVA for short, is a legal agreement that, for people owing 15,000 or more, can write off up to 75% of the debt. Seen as an alternative to bankruptcy, an Individual Voluntary Agreement lets the person in debt, the debtor, pay off the remaining debt in amounts that still allow them to keep up with their mortgage, food, bills etc.

The IVA takes place between a Licensed Insolvency Practitioner and the debtor. With obvious benefits including having up to 75% of the debt wiped off, an IVA is also an agreement between the Licensed Insolvency Practitioner and the (unsecured) creditors who are owed the money. Because the creditor is not allowed to then contact the debtor directly, this arrangement means goodbye to demands by phone and post.

For the creditor who is owed money, an IVA is often the best solution because chasing money is a costly process. At least with an IVA they're aware they could get more money back than if the debtor declares bankruptcy. Because an IVA is approved by the Licensed Insolvency Practitioner as well as the creditor, the creditor has already decided that an IVA is the best way in which they are going to receive some of their money back.

An IVA is a flexible agreement based on the individual debtor's circumstances and finances. From start to finish, setting up an IVA can take between 6-8 weeks, with the debt amount set to be repaid between 3-5 years. IVAs are often popular with debtors who wish to try and protect their assets, which may be at a higher risk if they opted for bankruptcy instead.

There are Licensed Insolvency Practitioners who specialise in IVAs so it is worth considering or learning more about IVAs before opting to declare bankruptcy. But remember, as with all financial repayment processes, there are advantages and disadvantages, so talk to a professional before choosing


About the Author:
Anybody in debt should read what is an IVA and you will be in a position to decide whether to apply if you qualify



Article Originally Published On: http://www.articlesnatch.com


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