How to Apply For an IVA
An IVA is a legal way to repay debt. It is much better than bankruptcy and debt relief orders because it allows you to pay back your debts on a regular basis. It is also a much better option than having your creditors repossess your assets. Moreover, it can restore your reputation and give you the opportunity to access credit in the future.
An IVA repayment plan lasts five to six years, depending on the amount of debt you owe and the lump sums you pay. The repayment amount is based on your ability to pay back the debt. Generally, you will have to pay back less than you owe. Your Insolvency Practitioner will work with you to determine what amount you can afford to repay, and this amount will form the basis of your IVA proposal. Once approved, the proposal will be sent to your creditors and they can agree or reject it.
You can continue operating your business while under an IVA, but you might have trouble getting credit from some suppliers. In addition, you may have to sell your house to pay off your debts. If you have a home, the IP will look into how much equity you have to pay off your debts. Typically, you can expect to pay off your debts in five to six years, but you should be aware that you may have to release some equity.
You can pay in lump sums or increase your monthly payments over time. The IVA process starts with a thorough review of your financial situation, including your employment status, your creditor list, and the amount of debt you owe. Then, your IP will contact your creditors to arrange a meeting. This meeting can be held in an office setting or via video conference.
The application process isn’t instantaneous – it can take four to six weeks. During this time, you may have trouble paying your debts, but the insolvency practitioner will be able to amend your payment plan if you’re having trouble. If you don’t meet your repayments, you may have to face bankruptcy and other legal consequences.
An IVA will negatively impact your credit rating. It stays on your credit file for six years, so it can impact your ability to obtain new credit, mortgages, and other financial services. For this reason, you should be very careful when choosing an IVA. You should seek legal advice before making any final decisions.
In order to be eligible for an IVA, you must have a surplus of income. However, your income must not exceed your living expenses budget. If your debts are large, it’s important to find a suitable bank account.
How to Apply For an IVA was first seen on Debt Worries