It is no secret that people struggle with debt in today’s society. Many are determined to become debt free, but the time that it would usually take seems unachievable. Financial freedom is a dream that individuals hope that one day will come true. Some have asked the question, “Is an IVA right for me right now?”.
The term “IVA” stands for an Individual Voluntary Arrangement. Individuals that are having a hard time controlling their finances consider this arrangement as a possible option. People choosing this option are supposed to pay one affordable payment per month. This is a binding agreement between the individual and their creditors.
If the IVA is followed and fulfilled, a write off is given for the remaining debt that is unsecured. Therefore becoming debt free will generally be the end result. This arrangement has appealed to many individuals who find themselves in debt.
The way that the arrangement works is by having the individual continue to make monthly payments that are affordable. Creditors are prevented from taking any further action against the individual. Interest rates and other costs are frozen in relation to what is owed. Therefore, the hopes of getting out of debt may be accelerated.
The arrangement is generally completed in five years. Debtors are committed to giving whatever they can to pay off the debt. Instead of filing for bankruptcy, this arrangement can be an alternative. The individual is then protected from certain circumstances such as having their home repossessed.
Insolvency Practitioners are helpful since they provide counsel concerning whether an individual should apply for an IVA. If the individual is deemed a qualifying candidate, a proposal outlying the monthly payment amounts will be supplied. This proposal is then submitted to the individual’s creditors for acceptance. Three quarters of the creditors have to approve the proposal before the IVA can be accepted.
An IVA is right for the individual who can make monthly payments at a cost that’s affordable to them. It is expected that if the person owns a home, that they should remortgage their property in the 54th month of the IVA.
Consumers should know that unlike bankruptcies that stay on your credit report for ten years, Individual Voluntary Arrangements stay for only six years. Applicants can only apply if they live in England, Northern Island, or Wales.
Want to learn more about what an IVA is then try visiting the Payplan website which has a wealth of information.