Member Article

Individual voluntary arrangement (IVA) company: An overview

If you are stuck within the spiraling chain of debts and overcoming any of it seems like next to impossible; an Individual voluntary arrangement (IVA) makes a good option for you. In countries like England and Wales, an IVA (individual voluntary arrangement) was introduced by the government in 1986 to offer an alternative to bankruptcy. The range of debts covered under IVAs includes personal loans, credit card balances and other forms of unsecured loans.

Fundamentals of IVA

An IVA is a legally binding contract between debtors and their creditors. It enables a debtor to make a formal proposal to settle debts within a practical and stipulated period of time. The contract can, however, last for not more than 5 years. Besides, the debtor needs to owe more than 15,000 and have something to offer to their creditors each month.

Insolvency practitioner (IP)

An insolvency practitioner (IP) plays a crucial role in the entire process of IVAs. An IP acts as a mediator between the debtor and the creditor and put forward the proposal to creditors and negotiates an agreement. If 75% of the creditors agree to the terms of proposal then it is binding on the remaining ones as well. Although creditor can put forward several changes to the proposal but it is not binding on debtor to accept them all.

Once the agreement is finalized, the debtor pays a monthly payment to the IP based on what is agreed up on and is within the capability of a debtor.

IVA companies

If you are neck deep into debts and looking for an IVA Company to help you overcome all your debts, it shouldn’t surprise you that there are some really good IVA companies and some not so good ones in the market. Start with a web search and visit the website of each provider that pops up on the first page of your search result. Besides referring to the testimonials posted on the website of each provider, there are a few simple questions that can help you find a reputable IVA company to get you out of debt. A few of them include:

• What is their success rate in getting an IVA accepted?
• How good is their support system during the IVA?
• Was the advice realistic enough for you to suffice the monthly payments?
• Is the IVA Company charging you a fee even before the approval on the proposal by your creditors?
• Are there any hidden fees?

These questions must be kept in mind when you consider taking assistance of an IVA company. In addition, look for a company that consolidates all your debt to give you one low manageable monthly payment along with low interest rates on your repayment loan. Once you find a reputable IVA company, fill in a debt plan application form provided on the website of the company in order to receive a quote from a professional advisor of the company.

However, remember that the set up cost of an IVA can be demanding and you may have to pay an upfront fee.

Conclusion

An IVA may seem a lesser inflicting option, but even this can affect your future credit score. In some cases people may find it difficult to rent a flat or even get a job, due such unstable financial crises. Hence, consider seeking advice of a professional debt advisor. Among other significances, debt advisor will help you assort your repayments, to ensure there is less chance that your property is repossessed. However, any default in making monthly payments ca leads you to bankruptcy.

This was posted in Bdaily's Members' News section by David Faulkner .