Make affordable repayments to your debts
- Up to 85% debt can be written off
- Get debt-free in just 5-6 years
- No more threats of legal action
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IVA Debt Advice
IVA stands for Individual Voluntary Arrangement. It is a formal agreement, and allows an individual to make affordable payments towards his debts, over a period of five or six years. Towards the end of IVA, any unsecured debts that remain are written off. One also has a choice at making a single lump sum payment, which is known as a lump-sum IVA.
IVA comes with a number of benefits:
Payments are more affordable and are made over a period of five to six years. Homeowners often get to keep their homes. This is while they maintain mortgage payments and any loans over properties, which are unsecured.
Before IVA is agreed upon, there is no set fee which needs to be paid.
While an IVA is in progress, certain fees need to be paid. They are however included in monthly repayments and are set by creditors.
Frequently Asked Question
Let us now consider who is a suitable candidate for IVA:
IVA is a form of insolvency. It is also an arrangement between a debtor and creditors which is legally binding.
In the event that a debtor is in a position to regularly pay an amount towards his debts, IVA can come across as a feasible solution. IVA may still be a feasible arrangement in the event that a debtor is not in a position to pay the full amount that his creditors wants him to pay.
Another scenario wherein an IVA comes across as a feasible arrangement is wherein a debtor has a lump sum amount that he can pay towards his debts.
Before committing to an IVA, it must be considered in detail as it lays consequences over debtor’s financial, professional and personal life. It may be a fine idea to get a financial expert’s counsel before committing for the arrangement.
IVAs do reflect on the credit file and are a type of insolvency. They reflect over the credit file following a period of six years from their inception. During this phase, a debtor may come across difficulty in getting access to credit.
In terms of UK’s financial market and going by the rules that prevail presently, if a debtor intends to get credit during his IVA, he must get a written permission from his Insolvency practitioner. This would be for an amount that exceeds £500.
It is over a public register known as an Individual Insolvency Register that details of IVAs are listed. While one is very unlikely to come across this information, it is something that a debtor should be aware of.
Let us now consider the costs and fees involved with IVA:
Some costs and fees are going to be involved with an individual Voluntary Arrangement. This is irrespective of the party that arranges the IVA for you.
It may be possible however that a financial institution does not charge a debtor over consultation regarding an IVA.
The fees are all agreed by a debtor before they are levied. Similarly, a financial institution may choose to do away with any fees in the event that a debtor intends to discontinue the IVA arrangement.
Different financial institutions charge different fees for facilitating an IVA for a debtor. It is best to know about these fees in detail prior to going ahead with the arrangement.
There are some cases wherein an IVA lays its influence over the debtor’s job:
If the debtor is a company director, or has an employment in the fields related with law, real estate, finance or accountancy, or if he holds a pub license, his job may be affected.
In order to figure out if your job would be affected by an IVA, it is best to interact with your trade union or professional membership body. You may also choose to interact confidentially with the HR department of your organization.
In most cases, jobs aren’t affected by an IVA.
Individual Voluntary Agreement
Debt Management Plan
|1. IVAs normally last for five years.||1. It take many more years until all debts are paid of including interest|
|2. Legal actions are not taken||2. Creditors can still take legal action|
|3. Homes are protected||3. Home is less protected|
|4. Interest are frozen||4. Interest and charges are not guaranteed to be frozen|
|5. From the day Your IVA was approved, it will stay on your credit file for six years or until it is finished should it go on for longer than six years||5. In a DMP you may face difficulty with your credit file for the duration of the plan. When a default notice is filed at any point during your DMP, it will stay on your file for 6 years from the date the last default is issued|
|6. A large proportion of debt may be written off at the end of the IVA||6. In a DMP all debt is repaid. it is not guaranteed that interest and charges will be frozen by creditors|
TAKE A LOOK
- Why an IVA can be better than Debt Management Plan Individual Voluntary Agreement is a legally binding contract between a Read More