An IVA is a debt relief plan that aims to settle all of your debts in a single, affordable payment. Your IP will draw up a repayment plan that will be acceptable to your creditors and meet your financial needs. It is important that you be honest and completely transparent with your IP when preparing this plan. Consider all of your expenses and income to determine how much you can afford to pay each month.
An IVA typically lasts five or six years, but it can last longer. It is important that you follow the terms of the plan or risk being turned down by creditors. Your creditors will tell you what they think of your proposal, so you should make sure to listen. Once your proposal is approved, you can begin making your payments normally. The IP will then review your financial situation every year and make sure you are still able to meet your obligations.
Your IVA payment is based on a calculation of affordability, which involves subtracting household bills from your income. You must also make allowances for some expenses, including extra money. You will also have to transfer your banking information to the new account, and arrange for your income to go into this account. Once this is done, you will make a payment that will be fair to your creditors.
You can still apply for a job after your IVA has been approved. Most jobs aren’t affected by an IVA, though there are a few exceptions. If you are employed by a financial institution, you may not be able to apply for an IVA. If you work in a disciplined industry, you may also face restrictions.
An IVA may not be the best debt solution for you if you cannot afford to make regular payments. If you cannot keep up with your payments, your IVA will be declared void. If you fail to meet your payments, your creditors can instruct the IVA supervisor to declare you bankrupt. If you are married, you can apply for a joint IVA to manage your debts in a coordinated manner. While this arrangement is technically two separate IVAs, you can use an adviser to make the arrangement feel as though it is one.
You should also consider bankruptcy, which is a much cheaper method of addressing debt. However, it doesn’t treat your assets as flexible as an IVA. You must have assets worth PS30,000 or less, and an income of less than PS75 per month to qualify for it. You should seek guidance about IVAs online before you choose the bankruptcy route.
If you choose an IVA, it’s important to note that your credit report will show that you entered an IVA. You can even see the details of your creditors on the public register, known as the Individual Insolvency Register. However, you shouldn’t use an IVA to borrow more money than PS500. Moreover, you may be required to re-mortgage your property to release the equity in it.