What is it?
An alternative to bankruptcy, an Individual Voluntary Arrangement (“IVA”) is a scheme created to help people struggling to repay debts. With an IVA you pay what you can afford, not what your creditors demand. Any interest owed or charges you may have incurred are also frozen and your creditors cannot pursue you for more money. After making your agreed IVA payments, any remaining debt is legally written off – normally after five years.
What will happen?
An insolvency practitioner makes the IVA proposal to creditors on your behalf and it has to be agreed by at least 75% by value of your creditors to be approved. You then agree on monthly payments, although some proposals also include a lump sum payment, using equity release, for example. The process can take as little as four to six weeks from application.
A standard IVA runs for a five year period. An insolvency practitioner controls the fund you contribute into and uses it to pay off creditors and to cover IVA fees. You will usually have regular reviews each quarter and a full assessment of your circumstances every year.
After five years of successful IVA payments your debt is cleared, even though creditors have usually received less than everything they are owed.
How White Maund can help
At White Maund, we always recommend the solution that’s best for your own circumstances. We’ll only suggest an IVA if we think you have an excellent chance of the people you owe money to agreeing to it. If an IVA is right for you, we will help set up the arrangement and deal with your creditors directly. Call us now for a free consultation, and to get your free copy of the ‘Is A Voluntary Arrangement Right For Me?’ guide.
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