IVA Explanation

IVA stands for individual voluntary agreement in which the debtor has to pay monthly instalment to the creditors to become debt free in the time span of five years. The IVA also typically involves the creditors agreeing to write off a portion of your debts. It is basically a proposal that the IVA service providers puts before the creditor to avoid the situation of bankruptcy of the debtor. There are online IVA services providers associated with IVA company who can assist the debtors in putting together the IVA proposal.

An IVA is a flexible arrangement in which the instalments are made easier in accord with the financial hardship of the debtor. So an IVA can be the best solution for debtors who are facing the prospect of bankruptcy. By opting for an IVA, debtors can obtain the following benefits:

• The creditors will typically write off a portion of the debt due.
• Debtors can take back the control of the debts and their lives
• Debtors can continue their business without the danger of their assets being seized.

A licensed insolvency practitioner will draft an IVA proposal for presentation to the creditors. The insolvency practitioner will usually offer to meet the debtor to discuss their financial situation, and use this information when drafting the proposal. The creditors will then study the IVA proposal and decide if the IVA can be approved or not.

An IVA only deals with unsecured debts. Mortgage arrears and hire purchase debts must be handled outside the IVA. IVA service provides often have calculators on their websites to help you determine your disposable income. They may use the information entered here when drafting a proposal for you.

If you are facing the possibility of defaulting on a loan or credit card agreement, it may be time to seek the help of an IVA Company. They will deal with creditors on your behalf and will work with all parties to ensure than an IVA is the best option for all concerned.