Iva Advice - Discover The Pros And Cons Of Individual Voluntary Arrangements

Iva Advice - Discover The Pros And Cons Of Individual Voluntary Arrangements

By:


This article is intended to explain the basics of what an IVA is and to offer some guidance on when it may be appropriate to consider one. Most references to IVAs on the web are from companies with a vested interest in offering you one, so there is a danger that the advice may be a little one-sided. The information in this article is unbiased and intended to provide the information you need to make an objective judgement about whether an IVA is right for you or not.

What Is An IVA?

An IVA is an Individual Voluntary Arrangement and is a legal agreement between you and the people you owe money to. It is a way of consolidating your debts into one payment, and will usually result in some of your debt being written off at the end of the process.

The usual requirement for being able to set up an IVA are that you have at least 15,000 in unsecured debts (ie debts which are not secured against your home, such as your mortgage) which you are unable to pay. Your debts must be to three or more creditors and you must have a regular income.

To set up an IVA you will need to have the agreement of at least 75% of your creditors (by value of the debts). If 75% or more agree to the IVA, then the remaining creditors have to go along with it. The majority of IVAs will last for a period up to five years, though the period varies depending on the circumstances.

Advantages of IVAs

Your monthly repayments may well be less than they were before

A proportion of your debts may be written off

You should be debt free at the end of the process

As the IVA is a private agreement, there are no public notices about it as there would be for bankruptcy

You will not normally be required to sell your home (as you may be with bankruptcy)

You will have only one monthly payment to think about

Creditors will no longer be allowed to hassle you for money owed

Disadvantages of IVAs

You have to pay for the IVA, so the process will cost you more than if you are able to deal with your debts on your own. Even if there are no fees up front, your monthly payments will include fees. However, the fees ought to be more than made up for by the reduction in your debts.

You must have at least 15,000 worth of debt

Future applications for credit may be affected, even after the IVA has ended

Your monthly payments could be increased if your circumstances change

If you don't keep up with the payments on your IVA you could still be made bankrupt

You need at least 75% of your creditors to agree in order to go ahead

IVAs are unlikely to be available to you if you have no regular income or significant assets

It will take five years before you are debt free (bankruptcy is one year)

IVA Advice - Conclusions

So one of the key things to remember is that IVAs are not free. There is a real cost to you in setting one up, and this must be considered when weighing up whether it is the right option for you. With the right advice, it may be possible for you to negotiate settlements with creditors yourself, but this depends on your circumstances and how confident you feel about your own negotiating abilities. Success in this will also very much depend on getting the right advice on how to do the negotiation.

Take care to ensure that you select a good debt advisor to arrange your IVA. More importantly, you need an advisor that will go through your situation with you, then tell you whether an IVA is actually the best solution. Choose only well established and reputable companies to talk to, and approach more than one so that you can compare what is offered.

About the Author:
Read recommendations for the best UK IVA specialists. K D Garrow"'s website also offers advice on direct payday loan lenders, debt consolidation loans and bankruptcy.



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


Tags: , , , , , , , , ,

|

Loading...
Related....
Videos...

Recent Debt-Relief Articles

Comments

Still can't find what you are looking for? Search for it!

Loading

Site Navigation:

Copyright 2005-2011 ArticleSnatch, LLC - All Rights Reserved.
Privacy Policy | Terms of Service.