What is an IVA?

IVA

An IVA is a legal arrangement that allows you to restructure your debts. This type of arrangement was introduced with the Insolvency Act in 1986, and can last for a few months to seven years. In practice, however, it usually lasts about 60 months, which is approximately the equivalent of five years.

This type of debt management allows you to freeze the interest rates on your outstanding debt, so that you can pay it off quicker. It also prevents your creditors from taking any further action against you. It is also a legal arrangement, meaning that your creditors are bound by it and can’t take legal action against you while you’re repaying your debts.

While the process of implementing an IVA can seem intimidating at first, it is a necessary step to getting out of debt. An IVA is a legally binding agreement that allows you to make affordable payments to your creditors. It freezes interest rates on your unsecured debts and prevents creditors from taking any further action against you.

Once your circumstances have improved, you may have enough money to make your monthly payments. However, you may find it difficult to find a good lender or a low interest rate. In these cases, you should seek advice from your IP before making a decision. Otherwise, you may end up being bankrupt and losing your home.

An IVA is a legally binding agreement that protects you from debt recovery action, but it also means that you will have to abide by the terms of your proposal. You will be protected from legal action from your creditors for a specific period of time and all remaining debt will be written off at the end of the period. You will also be subject to additional financial checks, including a review of your ability to make your payments.

Once you’ve decided to enter an IVA, your creditors will need to approve it. They will vote on your proposal at a meeting. However, some creditors may object to the terms and may ask for higher monthly payments or even include assets in your proposal. They may also want you to make payments over a longer period of time.

Before applying for an IVA, it is important to understand the full impact on your assets and home. Your IP should include a clause that outlines how IVAs affect your assets and equity. If you’re unsure of the rules, it’s best to shop around before making a final decision. This can make the process go faster and be less stressful.

While IVAs cannot eliminate your debts completely, it can help you rebuild your credit score. If you can make monthly payments, a significant portion of your debt can be written off in five years. Last year, half of all IVA cases resulted in written off debts of over PS20,000. However, this amount may vary based on your circumstances. For example, if your income increases, you may have to increase your payments to reduce the amount of debt you owe.

What is an IVA? was first seen on Help with My Debt