Individual Voluntary Arrangement FAQ
Anyone considering a debt solution will want to know as much as possible about what each different insolvency arrangement involves. Here is a list of some important Individual Voluntary Arrangement FAQ`s
What is an Individual Voluntary Arrangement?
This is usually the top Individual Voluntary Arrangement FAQ as a lot of people may never have heard of one.
An Individual Voluntary Arrangement (IVA) is an agreement drawn up by you and a licensed practitioner working on your behalf to pay a reduced amount on your current repayments. It works by consolidating all debts into one monthly repayment. The amount you pay back is derived from your disposable income after all of your living costs have been accounted for.
Am I Eligible For An IVA?
To be eligible for an IVA it is required that your debts are over £15,000. You also need to show that you have a regular income and can afford to make a minimum repayment to creditors of at least £200.
What Are The Benefits Of An IVA?
This is another of the top Individual Voluntary Arrangement FAQ`s as the benefits of a debt situation are essential.
- An IVA can significantly reduce monthly creditor repayments by freezing interest rates and late payment charges on your current repayments. Any legal action (on-going or potential) can be stopped by taking out an IVA.
- Your supervisor (person working on your behalf) takes care of every aspect of interacting with your creditors meaning no more phone calls and letters for you to deal with.
- Your home is safe from repossession by entering into an IVA. You may be asked to release any equity you may have later in the arrangement.
- After an IVA has ended any unsecured debt that is outstanding will be classed as settled, possibly saving you thousands of pounds.
How Do I Get An IVA?
Due to an IVA being a formal agreement it is required to be set up by a licensed insolvency practitioner. You have to find someone who can put one in place, there are many companies offering this service online. A good debt advisor will be able to put you in touch with a suitable firm.
How Is An IVA Put In Place?
The Individual Voluntary Arrangement will be put in place upon the agreement of the reduced monthly fee by 75% of your creditors. The proposal will be put to creditors in a meeting set up by your supervisor. Once in place the IVA will usually last for five years.
What Disadvantages Do IVA`S Come With?
This is another essential Individual Voluntary Arrangement FAQ.
- An IVA will stay on your credit record for six years making it hard to obtain credit.
- You may not have any new credit during the time of the IVA; this would be seen to hamper your ability to make repayments.
- You must keep up with repayments or face possible bankruptcy.
- Creditors can take a while to update records meaning they may still contact you after the IVA has started.