An Individual Voluntary Arrangement (IVA) is a way of consolidating your debt into one simple monthly payment. During the IVA, you will work with an insolvency practitioner to come up with a debt repayment plan that is both fair and affordable. Once the IVA has been agreed, creditors can no longer target you. You are also protected from creditors and bailiffs.
The first step in the process of applying for an IVA is to provide complete, accurate information. This includes your income and expenditure. In addition, you may have an allowance for special circumstances.
Your IVA provider will then work with you to make your payments. They will look at your assets and disposable income and determine if your monthly payments are affordable. Generally, the more assets you have, the more money you can borrow from your creditors.
Your provider will also help you to renegotiate your existing payments. It is a good idea to check with your provider annually to ensure that they are able to help you keep up with your IVA payments. If your finances change, they may be able to modify your payments or even arrange a payment holiday.
However, if your debts are too large to qualify for an IVA, you may need to consider a formal arrangement with your creditors. Depending on your situation, you may be able to sell assets to pay off your debts. Alternatively, you could remortgage your home to release equity for your repayments.
If your debts are less than a quarter of the value of your home, your property will not be automatically forfeited. Rather, you may have to remortgage your home or refinance it to release equity for your payments.
Some people are unable to take out an IVA due to their credit rating. Unfortunately, this can have adverse effects on your financial situation. For instance, you may have a difficult time finding a lender with a competitive interest rate. Alternatively, you may have to put down a substantial lump sum in order to secure an IVA.
If you have a good credit rating, your IVA will likely be accepted by your creditors. However, you should take the time to research your options and find out if an IVA is right for you.
The good news is that an IVA can be a great way to get your spending under control. The bad news is that it can also be a very stressful experience. Fortunately, an IVA is an affordable option that can help you to become debt free.
When you decide to apply for an IVA, you will need to choose a provider who has a proven track record of success. Before you sign on the dotted line, however, you should shop around and get as much information as you can about their service and their fees.
Many IVA providers offer a free initial consultation. However, you should be aware that you may be required to pay a fee for their services.