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Individual Voluntary Arrangement is the term used to describe a legally binding arrangement between you and your creditors. The fact that an IVA allows you to pay a smaller amount than the actual amount owed, and be debt free in a particular amount of time, is its major advantage. Although it can be considered instead of bankruptcy, you also have the option of going for an IVA even if you are already in a bankrupt state.
An IVA is a process that can save you from the dire consequences of bankruptcy. It is a contract which involves your creditors as well as an Insolvency Practitioner, who acts as an intermediary between you and your creditors. The practitioner is responsible for handling the payments to the creditors so you do not have to deal with them directly.
Beneficial to both the debtor and creditors, an IVA makes it simple for you to pay your debt, and it also ensures the creditors higher payments than other alternatives. These days, there are several organizations which provide IVA services and guide you through the process. In case you want to go for an IVA, two big options are available, including hiring a fee-based specialist, or going through a fee-free agency or charitable group, which can help you with the process for free.
Despite the fact that it may sound like an ideal alternative, there are some things to consider prior to entering into an IVA. The first to do is to see whether you are even eligible for an IVA. You can apply for an IVA on the condition that you have a steady income up to a specific level, and if you owe money to a minimum of three creditors. Then you need to pick an organization, which can help you set up an IVA and hire an Insolvency Practitioner. Many IVA specialists are present in the UK; however, hiring a reliable person, who acts in your best interest rather than going after a profit, is important.
It is very crucial to observe your financial situation and your monthly income, and figure out exactly how much you can afford to pay on a monthly basis to your creditors. In case you default on your payments, the IVA does not uphold, and legal action can be adopted against you. Hence, the plan you select should be one, in reference to which you can remain steadfast.
Also important is the consideration of the long-term consequences of an IVA before you go for one. An IVA can have an impact on your credit rating, although it is better than bankruptcy in reference to this. An IVA can be kept private; on the other hand, a bankruptcy has to be announced and negatively affects your reputation. The time period of the IVA is another perspective that should be considered while making a selection. IVA plans, depending on your choice, tend to last for three to five years.
Therefore, it is important to consider all aspects prior to selecting an IVA plan. Because the consequence of any default in payments can be a legal action, you have to be careful when selecting a plan, and should opt for one that you can follow through with.
An IVA is a process that can save you from the dire consequences of bankruptcy. It is a contract which involves your creditors as well as an Insolvency Practitioner, who acts as an intermediary between you and your creditors. The practitioner is responsible for handling the payments to the creditors so you do not have to deal with them directly.
Beneficial to both the debtor and creditors, an IVA makes it simple for you to pay your debt, and it also ensures the creditors higher payments than other alternatives. These days, there are several organizations which provide IVA services and guide you through the process. In case you want to go for an IVA, two big options are available, including hiring a fee-based specialist, or going through a fee-free agency or charitable group, which can help you with the process for free.
Despite the fact that it may sound like an ideal alternative, there are some things to consider prior to entering into an IVA. The first to do is to see whether you are even eligible for an IVA. You can apply for an IVA on the condition that you have a steady income up to a specific level, and if you owe money to a minimum of three creditors. Then you need to pick an organization, which can help you set up an IVA and hire an Insolvency Practitioner. Many IVA specialists are present in the UK; however, hiring a reliable person, who acts in your best interest rather than going after a profit, is important.
It is very crucial to observe your financial situation and your monthly income, and figure out exactly how much you can afford to pay on a monthly basis to your creditors. In case you default on your payments, the IVA does not uphold, and legal action can be adopted against you. Hence, the plan you select should be one, in reference to which you can remain steadfast.
Also important is the consideration of the long-term consequences of an IVA before you go for one. An IVA can have an impact on your credit rating, although it is better than bankruptcy in reference to this. An IVA can be kept private; on the other hand, a bankruptcy has to be announced and negatively affects your reputation. The time period of the IVA is another perspective that should be considered while making a selection. IVA plans, depending on your choice, tend to last for three to five years.
Therefore, it is important to consider all aspects prior to selecting an IVA plan. Because the consequence of any default in payments can be a legal action, you have to be careful when selecting a plan, and should opt for one that you can follow through with.
About the Author:
Edward Woodwards is a financial consultant. You can take iva help and solutions to debt problems. Find out more information at his recommended website http://www.iva.org.uk.
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