IVA Information and resources

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Debt Consolidation Solutions
Did you know the average debt per American household is over $9,000? If not managed carefully, even smaller amounts of debt can rapidly spin out of control. If you only make minimum payments on credit cards, have been refused credit recently, use a large part of your paycheck to pay off debt, or receive calls or letters from collection agencies, these are warning signs you need to manage and reduc... Read debt consolidation article



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IVA Information and resources
If you're thinking about an IVA, it is essential to get the best information possible. This is because although an IVA can be a manageable way to resolve your debt problems, it can also represent a commitment of up to five years. Getting good IVA information is an important part of deciding whether you want one.

This article provides IVA information and an overview of the IVA process to help you make an informed choice about how to solve your debt problems.

What Is An IVA

The Insolvency Act of 1986 introduced the IVA as an alternative to bankruptcy. An IVA enables debtors to try and reach a settlement with their creditors which usually involves the repayment of the debt in monthly installments and a reduced repayment amount. An IVA is a legally binding contract between debtor and creditor.

Information About The IVA Process

You find an Insolvency Practitioner to act on your behalf to draft and propose the IVA to your creditors. The process of applying for and setting up the IVA usually takes about 4-6 weeks, which includes activities like fact finding, collecting evidence, drafting the IVA proposal, sending the proposal to the creditors and waiting to hear whether it has been accepted.

During this time, in the majority of cases, the debtors will only need to take part in minor activities at this stage like providing evidence and signing the documentation.

The IVA that is proposed to the creditors is based on what the debtor can realistically afford to pay over a five year period. In most instances, it is be made up of sixty monthly payments, although it can also include lump sum contributions such as from the release of equity from a property.

Whether or not an IVA is approved by the creditors depends on its receiving a 75% majority in favour of it. Most lenders have standard terms for what they will accept, which normally includes a reduction in the overall level of debt by as much as 75%.

When the IVA has been approved, it runs for a five years. During this time payments are made on a monthly basis into a fund governed by the Insolvency Practitioner. The money in the fund is used to pay off the creditors and the Insolvency Practitioner's fees.

Also during the period, the creditors are required to freeze all interest on the debts, and they are not allowed to pursue the debts.

If at the end of the five year period, the IVA has been satisfactorily completed, all of the debts are cleared.

Why Were IVAs Introduced

The IVA was initially designed as a convenient way of processing insolvency cases without incurring the costs and court time involved in bankruptcy proceedings. The IVA process is therefore much simpler than bankruptcy and the outcome is significantly less severe.

Information to Help You Decide If an IVA is Right for You

An IVA is appropriate for those who are unable to pay off their debts but do not want to file for bankruptcy. An IVA is likely to succeed if:

You have a minimum unsecured debt of around £15,000 -20,000.

You could make monthly repayments of at least £250-300.

You have a stable monthly income.

The Advantages Of An IVA

An IVA enables you to only pay back an agreed percentage of your debts

While an IVA is in place, your creditors are not allowed to harass you.

Unlike bankruptcy, an IVA doesn't affect your professional status or your ability to hold public office.

With an IVA, interest on your loan is frozen which means that your debt won't keep growing

Mike Curry runs a free and independent national IVA information and advice line called Clear Start. For further information, please click here: Individual Voluntary Arrangement or telephone 0800 138 5445.

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IVA Advice from the pros

An IVA (individual voluntary arrangement) is an alternative to bankruptcy introduced by the government as part of the Insolvency Act 1986. This article provides an overview of IVAs and suggests what readers should watch out for when looking for IVA advice.

What Is An IVA

An IVA is an alternative to bankruptcy introduced by the Insolvency Act of 1986. It enables individuals facing serious debt problems to make a proposal to their creditors to reach a settlement. If the proposal is approved by a majority of the creditors, then the IVA acts as a contract that binds all parties and prevents any further action. A standard IVA will offer to pay whatever the debtor can afford each month into a fund over a five year period, until the debt is cleared. With an IVA:

Interest on the loan is frozen
Legal proceedings are stopped
The overall debt is reduced

Why Is It Important To Get Good IVA Advice

When considering an IVA it's vital to get the best advice possible, and to work with an organisation that is both professional and independent. By getting unbiased advice you can be sure that you are making the right decisions and can be confident about the choices that you make. Good IVA advice is also important because signing up to an IVA can involve a commitment of up to five years, so it's important that you understand what you're getting into.

What To Watch Out For When Looking For IVA Advice

There are some companies who may try to convince you to sign up to an IVA even if it's not appropriate for you. Furthermore, some organisations offer IVA services but because they don't specialise in them, they may not actually be the best people to take advice from.

What You Should Check For When Looking For IVA Advice

That the IVA advice you're being offered is impartial
IVA Advice should take into account the perspectives of both the debtor and the creditors.
IVA advice should be compliant with appropriate licensing and regulation
Advisors should have IVA and debt management experience
All IVA advice and supervision processes and systems should be defined and governed by experienced professionals.

Mike Curry runs a free IVA advice line called Clear Start, to help people facing serious debt to regain control of their financial situation. For further information please visit http://www.clearstart.org or telephone freephone 0800 138 5445.


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IVA Information and resources
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