Bankruptcy

IVA help - IVA advice ?

Individual Voluntary Arrangement can be used as a debt solution by individuals and certain types of business (i.e. sole traders or partnerships). Correct IVA Help and IVA Advice is crucial.

This solution is closely related to a bankruptcy proceeding in that it writes off your debts and is a legally binding agreement.

How IVA advice works;

• You need the help of an Insolvency Practitioner (IP). He will assess your debt situation and work out how much you can repay to eradicate your debts.
  
  During this process you may also apply to put a halt to creditor action against you whilst you prepare your repayment proposal.
  
  
• Your IP calls a meeting of your creditors and presents your proposal. You need creditors to vote in favour of your proposal at a 75% rate of the debts that you owe to be able to set up the IVA.
  
  Creditors can attend the meeting and vote in person, give a proxy vote or not vote at all. The IVA can be set up irrespective of non-voters wishes so long as you get your percentage agreement the IVA will then become legally binding for all creditors. Creditors will accept an IVA on the basis that they will usually get more money than if you declare yourself bankrupt.
  
  
• Your IP will set up your IVA and arrange payment to creditors. This can take the form of regular monthly payments and/or lump sum payments depending on your proposal. Once your IVA is finished (usually after 5 years) any remaining debts that you owe will be written off.

IVA help, IVA advice

IVA help could be the best debt eradication solution for people who have financial problems, IVA advice is essential.

IVA advice can :

• Get rid of your debts within a specific period of time via a schedule that is affordable. With this kind of solution you will be debt free once the IVA is complete.
  
• Write off up to 55% of your debts.
  
• Keep creditors off your back as an IVA is a legally binding agreement the terms of which your creditors have to agree to.
  
• You will not have to use your assets (i.e. your home, car etc) towards repayment. Payments that you make can be based on a monthly repayment or a one-off payment.
  
• Carry on your everyday life. Declaring yourself bankrupt, puts restrictions on what you can do for a living, types of professional positions that you can hold, the kind of bank account you can have and how you can get future credit. These issues won't happen with the right IVA help and IVA advice.
  
• Still run your business in certain circumstances. If you are a sole trader or a partner then you could, use an IVA to help you manage your debts if you believe that the business will be a going concern in the future.
  
• Kept confidential so that nobody need know that you are going through this process.

Drawbacks to IVA help?

Debt management solutions have drawbacks. Your aim should be to compare the benefits to decide on the best solution. Issues that you may want to think about include:

• You are committed to your IVA for the period that it lasts. If you default on your commitments then you could be forced into bankruptcy. This could mean that you are making debt repayments for the next 5 years.
• If your income improves while you have an IVA in place then you will have to increase your payments to the plan. This will be monitored by your IP.
• Your creditors can ask for some of your assets to be used in your IVA repayment such as the equity that you have built up in your home before they agree to your proposal.
• You will need to have enough money free from your monthly budget to make your payment, usually around £250 per month.
• You may find it hard to raise additional finance during your IVA. You are unlikely to be approved for unsecured loans or overdrafts, and your IVA status will go on to your credit record.

Do I qualify to take out an IVA?

Not everyone will qualify for IVA help even if it is their chosen debt eradication solution.

This may be a good solution if you:

• Owe over £15,000 to a minimum of 3 creditors.
• Can afford to pay back at least £250 a month, have a suitable large lump sum to offer and/or to use assets towards debt repayment.
• In a full and final IVA up to 40% of the debts can be written off, subject to a lump sum being made available to the creditors.

This site is for information only, all debt solutions are provided through our associate company who are fully compliant and regulated.