Individual Voluntary Arrangement UK
Sometimes in our lives we find ourselves slipping in to debt by falling behind on payments to our creditors. It is becoming harder and harder to make ends meet on a regular basis with household bills and living expenses on the rise meaning there are times when we just can`t make a repayment on our credit cards or loans. Fortunately in you are living in the UK you can apply for an Individual Voluntary Arrangement.
Individual Voluntary Arrangements
Individual Voluntary Arrangement UK (abbreviated to IVA) is an option for people with debts over £15,000 to have the chance to make repayments to all creditors in one monthly payment. To be approved for an IVA there are certain criteria you must meet:
- You must have at least £ 15,000 worth of outstanding debt owed to three or more creditors.
- You must have a minimum of £ 200 of disposable income available to make payments.
- You must prove that you have a regular income.
If the criteria are met then trained advisors can help you to fill out an income / expenditure form to decide upon a monthly repayment affordable by you to offer to your creditors. 75% of your creditors must accept this arrangement for the IVA to get the go ahead. An IVA plan in the UK is put into place, and will last, approximately five years and during this time you will be unable to obtain credit, nor will you be able to find credit available to you for 12 months after the IVA has ended. However, once the IVA has ended all unsecured credit is abolished, whether the full amount has been paid or not.
Creditors and Payments
An Individual Voluntary Arrangement UK is a legally binding contract which must be adhered to by your creditors. As long as you keep up with payments you will be left alone by creditors, no more threatening letters or constant bombardment of phone calls day and night. If repayments begin to be missed, creditors are able to act and apply for a court order for them to retrieve their money.
A major plus with an Individual Voluntary Arrangement UK is that your home is under no threat of repossession although any equity in your home may be required to be released to pay creditors. As far as assets go they too can also be kept but more expensive items may have to be sold and replace where a lower cost alternative is available.
Help with IVA
Going ahead with an Individual Voluntary Arrangement UK is a big decision; there are a number of websites that can help you through every step of an IVA, from listing the advantages and disadvantages to setting up and holding meetings with your creditors on your behalf to discuss your plan.
There are some fees to be paid to whichever company has set up the IVA for you. They are Nominee`s Fees and Supervisors Fees. These fees do not affect your repayment figure but are deducted from the amount creditors receive.