Apply For an IVA to Get Out of Debt
If you are struggling to pay back your debts, you may be able to apply for an IVA. This is a legally binding contract between you and your creditors to repay a percentage of your total debt. The term of the agreement can vary from five to six years, and is recorded on your credit reference file.
An IVA will allow you to repay your debts in a more affordable and reasonable manner. Your IVA provider will work with you to determine what your monthly payments will be. It is important to remember that an IVA cannot be used to repay credit cards, store cards and other unsecured debts.
Often an IVA will include a repayment plan, based on your disposable income. You may be able to increase your monthly payments if you have improved financial circumstances. For example, if you are a stay at home mum, you might be able to afford a higher payment.
It’s important to be honest when filling out the IVA application form. Your IP can advise you on the best documentation to provide. Providing inaccurate or incomplete information can delay the process.
Using the right documents will ensure that your proposal is complete. A good insolvency practitioner will be able to give you free advice and will check that your document is in order. Some IPs require you to pay an up front fee before putting forward an IVA proposal, but this can be forfeited if the proposal is rejected by your creditors.
Another way to speed up the process is to provide as much information as you can. As much information as possible about your finances and your income will help the IVA provider find you a suitable monthly payment. In many cases, it can be helpful to put together an initial statement from your mortgage provider, so they can start the process faster.
While an IVA can be a great way to get out of debt, it’s not for everyone. If you have a large amount of debt, it might be best to seek out other options, such as bankruptcy. Keep in mind that an IVA can affect your credit rating, which can affect your ability to get new credit.
Getting an IVA is a good first step to becoming debt free. But you should also get professional advice if you feel you need it. There are many companies offering free money advice, including National Debtline. They can tell you whether you are eligible for an IVA and will help you decide if it’s the best solution for your situation.
To apply for an IVA, you will need to gather information about your financial situation, as well as your assets. This includes any property you own, such as your home, as well as other assets you may have.
Depending on your financial situation, your creditors may also request that you include certain assets in your IVA. Alternatively, you may be able to exclude certain assets from your payment scheme.
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