An IVA (Individual Voluntary Arrangement) is certainly a debt solution that works. Many people throughout England, Wale and Northern Ireland make use of the IVA process every year to resolve their debt problems. So it is most definitely a tried and tested option. However you need to make sure it is the right option for you. Fining out if an individual voluntary arrangement is right for you is not about trying an online ‘debt calculator’ or some other gimmick, it’s about speaking directly with an experienced debt advisor, discussing your problems in detail and finding the best solution.
Is an IVA right for you?
It really all depends on the details of your debt and your own personal circumstances. All debt problems are different and each difference can mean a different solution.
An IVA is a formal debt solution where you enter into a legally binding contract with your creditors. You have to be insolvent which basically means that you are unable to repay the debt you owe and your debt is greater than your assets. So it is not a decision to be taken lightly and you need to be fully aware of the facts and the implications on both a financial and a personal front. This is why expert debt advice is so important.
The IVA process has been devised and constituted as a legal process to help people with serious debt problems resolve their situation and make a fresh start free of debt.
How does an IVA work?
The IVA process, whilst serious, is relatively straight forward. The first thing to do is to seek experienced debt advice to enable a debt advisor to fully assess your circumstances in order to find out if an IVA is the right solution for you and whether you qualify for it.
If that is the case you would then formally apply to be considered. As this is a legal process a licensed insolvency practitioner must be used to administer the procedure. As part of the proposal you must agree a figure that you can afford that will be repaid to your creditors each month and this is usually done over a period of five or six years. After this period is over the rest of the unsecured money you owe is written off.
The proposal of how much will be repaid and how much will be written off in the IVA debt is put to your creditors and at least seventy five percent of the creditors holding the total debt must agree to the proposal.
If the proposal is agreed it can then be registered as an IVA and you then make a single monthly payment to the IVA Supervisor who then distributes this to your creditors in the agreed proportions. As long as you abide by the agreement your creditors cannot take any legal action against you and you should have no further contact from them.
How do you qualify for an IVA?
For all the information you need on this you should speak to an experienced debt advisor but in broad terms the qualification criteria is as follows.
You must be a resident of England, Wales or Northern Ireland and you need to be insolvent. Although you really need to have total debts of at least £15,000 IVA’s are processed at debt levels as low as £5,000. The IVA must be approved by your creditors. You also need a regular income so that your creditors can be confident that you can make the agreed payments.