Getting an Individual Voluntary Arrangement (IVA) is a way of making your debts more affordable. It is a legal agreement which will be registered on the Insolvency Register. This register is referenced by all the major credit reference agencies. If you are considering applying for an IVA, you should get advice from an experienced debt adviser.
You will be asked to make regular payments to the IVA provider for a period of five to six years. This will allow you to pay off your debts, but it will also have a significant effect on your credit rating. You will have to keep your IP up to date with your financial situation. If you need to increase your payments, your IVA provider will be able to renegotiate them. However, you must make all your payments on time. If you miss a payment, this will be regarded as a breach of the IVA agreement. If you fail to meet your IVA payments, you may be asked to pay a termination notice to your IP.
An IVA is a legal agreement between you and your creditors which stops them from taking further action against you. If you decide to apply for an IVA, you must give all the information requested. Creditors will receive a copy of your IVA proposal, which outlines the debts you owe and details your income and expenditure. They will then have the opportunity to vote on the proposal. The proposal is usually accepted if at least 75% of the creditors vote in favour. However, creditors may vote against the proposal if they believe the proposed payments are too high. They may also request modifications to the proposal.
The IP will review your debts and determine whether or not they can be included in the IVA. The IP may ask you to remortgage your home to release equity, or they may ask you to borrow money from an alternative source. It is important to remember that you must not take out new credit while you are in an IVA. You may find it hard to find a good rate of interest or a reputable lender. If you do, you could make yourself bankrupt or put your home at risk.
Your IVA provider may be able to arrange for you to pay a payment holiday, and you may be able to renegotiate your payments. If you decide to cancel your IVA, you will be required to pay a fee to your IP, and you will need to repay any outstanding debts to your creditors. You may also have to pay the IP a service charge. If you do not cancel your IVA, it will remain on your credit file for six years.
If you do not remortgage your home, you may lose your home. You may also be asked to borrow more money, or you may be asked to pay a higher monthly payment. If you decide to remortgage, your IP will review the balance of your mortgage and make a recommendation.
Apply For an Individual Voluntary Arrangement (IVA) was first seen on Debt Worries