An Individual Voluntary Arrangement, often referred to as an IVA, is a legal and binding agreement between you and your creditors (those to whom you owe money). Every month, you will make a payment of a set amount, for a period of up to five years. To determine what the set payment will be, the parties to the contract will review your financial situation as well as the total debt owed, and arrive at a number that the parties feel is fair. If there is any outstanding debt after you have made all of the required payments, the creditor is to consider the debt settled and accept the outstanding amount as a write-off.
IVAs are a recognized contractual obligation, not a form of debt management service. An IVA will require the use of an insolvency practitioner, a person who has been certified in the construction and documentation of IVAs. If you are considering an IVA, speak with an insolvency practitioner. They will be able to resolve your ability to enter into the contract and decide if it is practical for your set of circumstances.
The insolvency practitioner will interview you about your financial situation, in order to determine possible repayment figures. They will then write a proposition that outlines the terms based on the information provided during the interview. After examining the documents for accuracy, you will have to sign them. Once this is done, the courts will accept an interim order on your behalf, which will stop any creditor from pursing legal action based on your debts to them.
The next step is to schedule a meeting will all of the creditors. The insolvency practitioner will attend on your behalf as well. Most creditors do not attend the meetings, preferring to cast their votes for or against the proposal either by mail or fax. Each creditor is entitled to vote on whether the proposed IVA is acceptable. Whether the IVA will go into effect depends on the outcome of the vote. An affirmative vote from creditors who hold a total of at least 75% of your debt is required before the IVA is accepted.
However, this is not the end of the process and you will still require the aid of the insolvency practitioner. The practitioner will continue on with you, and monitor your payments to ensure that everything is being paid as necessary to each creditor. Many people have only paid 35% of their debt, with the remaining considered fully paid. Once you finish all of your monthly payments within the given span of time – which could be as long as five years – you will be fully relieved of all debts against you. The best part is the fact you will not lose any possessions or property.
Now Try : Insolvency Or IVA
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