IVA: A Viable Option

Individual Voluntary Agreement is a viable option to bankruptcy that many Brits and their creditors find appealing. An IVA is a legal and government approved way of resolving debut of £15,000 or more to 3 or more creditors over 5 years or less.

There are seven types of IVA's which are handled by Insolvency Practitioners for a fee. Once an IP has reviewed the case and determined a party is in fact eligible for an IVA, he then puts together a proposal for the creditors which is typically received favourably. If 75% of the creditors representing your debt accepts the proposal, the rest are legally bound to do so.

The benefits of the IVA versus bankruptcy are many. Your credit rating will show the IVA for an additional 12 months after the IVA is complete. However, lenders tend to look favourably upon IVA's where they do not do so with bankruptcies. Another benefit is that 75% of the debt is written off and there is no interest charged on the remaining 25%. And, unlike a bankruptcy, you hold control of your home. Your Insolvency Practitioner could exclude the home, or offer options, depending on individual circumstances.

Unlike bankruptcy, an IVA is strictly private, between you and your creditors. Bankruptcies are published in local newspapers, as well as the London Gazette. Keeping your financial situation private is priceless, indeed.

The IP continues with you through the process of applying for the IVA, putting together the proposal, calculating the repayment, meeting with your creditors and remains through your time in the programme. Your payment is made in one lump sum monthly to your IP who will then disperse the monies to your creditors on your behalf. Thus, your IP is truly your partner in the entire process, so make sure to choose someone which whom you feel comfortable.

An Individual Voluntary Agreement can be the answer to your financial dilemma during these difficult financial times. Use your money wisely, and seek financial counsel if necessary, but if you are simply unable to meet your financial obligations, speak with an Insolvency Practitioner for more information.
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The benefits of the IVA versus bankruptcy are many. Your credit rating will show the IVA for an additional 12 months after the IVA is complete. However, lenders tend to look favourably upon IVA's where they do not do so with bankruptcies. Another benefit is that 75% of the debt is written off and there is no interest charged on the remaining 25%. And, unlike a bankruptcy, you hold control of your home. Your Insolvency Practitioner could exclude the home, or offer options, depending on individual circumstances.