The Possibilities Of An IVA
An IVA or Individual Voluntary Agreement can assist anyone who is experiencing problems clearing their debt. It is an exceptionally persuasive option to family’s who are at risk of losing their home if they were made bankrupt.
You could benefit from an IVA if;
Your creditors have already refused to accept an informal debt management arrangement
You formerly had an informal arrangement, but you could not meet its provisions.
You are in debt to so many creditors that an informal debt management arrangement would be impractical. You could be made bankrupt, or you are currently bankrupt and you want to reverse that position. You formerly had an informal arrangement, but you could not adhere toits provisions.
Your creditors have not accepted an informal debt management agreement
You you are in peril of being made bankrupt, or you have already become bankrupt and you want to alter that situation.
You have so many creditors that an informal Debt Advice agreement would be impractical.
You may have a small company which you could not keep running if you became bankrupt. You would lose your job if you became bankrupt, jobs such as accountants, solicitors, police man and armed forces. You have access to a significant amount of money but it is still insufficient to completely repay your loans. You want a formal arrangement with your creditors to receive that lump sum and write off the balance of what you owe.
You have equity in your house. You will not necessarily lose your house if, with the agreement of the IP and your creditors, it can be kept out of the IVA or Individual Voluntary Agreement. However, your lenders will normally want the maximum amount of the equity in your house as they can get. With an IVA you are less limited restricted as with bankruptcy. EG, with an IVA or Individual Voluntary Agreement you are not obliged to notify your bank. So you can still be able to use your bank account.
And the disadvantages?
If you are unable to comply to the terms of your IVA, then the Insolvency Practitioner who is supervising your Individual Voluntary Agreement (IVA) or your lenders, can ask for your bankruptcy.
If the vast majority of your lenders do not acquiesce to your proposed Individual Voluntary Agreement you are effectively back to square one. It will be twelve months before you can make another IVA proposal. You should carefully consider your offer.
If you are a property holder, it could be that under the terms of the Individual Voluntary Agreement you have to sell your house. An alternate approach is to include a clause in your IVA whereby you get your home appraised after an prearranged time frame with the aim of releasing the “equity” in your property at that time, to your creditors. Your lenders may agree to you paying monthly IVA instalments for an additional year to cover the amount of equity in your home.
If your financial position alters and you can’t afford the payments, unless your Insolvency Practitioner can coerceyour lenders to accept a revised contract, your IVA will terminate. This could mean you are facing bankruptcy.
