An IVA (Individual Voluntary Arrangement) is a one kind of agreement with your lender to repay or part of your debts. You agree to make the monthly payments to a professional insolvency practitioner, who will divide this money between your lenders. An IVA settlement process can give you more control of your properties & assets than bankruptcy. Read here about What is an IVA Agreement …
The iva voluntary agreement settlement process can be flexible in order to suit your requirements however it can be expensive & there are certain risk factors as well to consider.
How an IVA works
An IVA settlement process needs to be set up by a qualified person, who is known as an insolvency practitioner. It can be an accountant or a lawyer. And when you hire an insolvency practitioner, he will charge monthly fees for the iva agreement. These can be pretty high & are generally based on the amount you repay through the IVA settlement process. Well, the insolvency practitioner directly deals with your lender throughout the lifespan of the IVA.
So, if you get in touch with a debt management company for an IVA settlement process, make sure you are aware of how much they will charge on a monthly basis before you decide. Well, debt management companies are possibly more costly since they charge a monthly amount on top of the insolvency practitioner’s charges.
How the repayments work
Well, if you’re decided to get an IVA settlement process, you will work out a payment plan with the insolvency practitioner. And it can be a lump sum, monthly payments, or a combination of both.
So, the payment plan must be based on an amount you can easily afford & the lenders will require agreeing to it. And if you are making the monthly payments the Individual Voluntary Agreement will generally last for five or six years.
Any monthly payment will be paid to your hired insolvency practitioner. And after that, they will then pay the money to your lender. And over time, some of this can also be kept by the insolvency practitioner for paying their own fees.
And if the money you pay is not sufficient to pay all your debts by the end of your IVA, you won’t need to pay the rest amounts. Your hired insolvency practitioner iva debt advice will advise you about this.
Benefits of an IVA
- You will be able to make reasonable monthly payments, generally over 5 to six years
- If you are a homeowner, you will be able to keep your property, as long as you can handle the mortgage payments & any sorts of secured loans on your assets.
- There aren’t any kind of setup charges to be paid before the IVA settlement process is agreed by the lender
- There are changes when your IVA settlement process is in progress, however these will be incorporated in your monthly payment & are set by your lender
- And if you’ve a lump sum to offer, it can be paid as a ‘full and final’ settlement. On the other hand, you can also a opt for the combination of a certain payment followed by monthly payments
- When you’ve made the last payment all the outstanding unsecured debt is written off & your lenders cannot pursue you for payments
Risks of an IVA
- If there is equity in your property, you will require to try to re-mortgage which might result in a pretty higher interest.
- And if you are not able to re-mortgage you will be able to make a maximum of 12 additional payments.
- And in case your IVA settlement plan fails, lenders might ask the supervisor of your IVA for the bankruptcy
- Your credit score will be negatively impacted
- Your lender might not agree to your IVA settlement program.
- At the end of the IVA settlement, the unsecured debts that can be included in the arrangement will automatically be written off
- The IVA settlement plan will be recorded on a public register
- When your IVA settlement is set up all your spending will be prohibited unless the IVA comes to an end
How to apply for the IVA
The very step is to determine whether the IVA is the correct bet for you. You can also utilize the free online advice tool or directly get in touch with the professional advisor.
And if you find that IVA is the suitable solution to your debt oriented issue, then go for a reliable and trustworthy financial management company that can help you through the setup process.
They will review your whole finances & put forward the iva voluntary agreement proposal to your lender.
That’s all about the “What is an IVA Agreement“. Thanks for reading our blog. Hopefully, our guide will give you a sufficient amount of information so that you can easily register yourself in an individual voluntary arrangement. But, before selecting a firm, you have to do proper research. You can also check out different local forums. On the other hand, you can also take suggestions from your friends, & family. There are a lot of reliable companies available. But before you hire a financial advisor, you need to make sure that he has sufficient experience to handle your case. Remember, your financial advisor or iva debt advice provider will charge you a specific amount on a monthly basis.
If you still have any sort of query or questions, then you can directly get in touch with us…you can give us a call or send us a mail. On the other hand, you can also contact us through our live chat support and iva debt advice portal. Don’t worry; you can reach us anytime at your convenience. We would be delighted to serve you!