IVA or Individual Voluntary Arrangement as it is properly known is a legally binding agreement between an individual and their creditors.
An IVA is often used as an alternative bankruptcy and was introduced in the Insolvency Act 1986. It allows an individual who has debts to make a proposal to their unsecured creditors to reach a revised settlement. The proposal is taken to a vote and if the revised terms are agreed by over 75% of the unsecured creditors who vote it becomes legally binding on all the unsecured creditors, including those that did not vote and prevents any further action being taken.
In most cases the costs involved in an IVA are far less than those involved in Bankruptcy and they usually provide a far better return to the unsecured creditors involved.
An IVA usually makes arrangements for payments due to creditors to be on deferred terms and for far less than the full amount of debt. After an IVA is complete it is common that the debt may not be paid in full, but all unsecured creditors included within the IVA can not chase for the remaining balances once it is complete.
The majority of IVAs are based on 60 monthly contributions but can also include a lump sum payment for example from releasing the individuals share in a property, life or endowment policies.
Monthly payments made into an IVA will cover the fees for putting together the proposal and also supervising the IVA as well as making the monthly payments to the creditors. Once an IVA has been agreed and set up the creditors are required to freeze all interest on the debts, they are prohibited from pursuing the debts and also prevented from progressing legal action in relation to those debts except with the consent of the court.
To find out more about this type of debt solution and to receive a FREE no obligation review, please click here
An IVA is often used as an alternative bankruptcy and was introduced in the Insolvency Act 1986. It allows an individual who has debts to make a proposal to their unsecured creditors to reach a revised settlement. The proposal is taken to a vote and if the revised terms are agreed by over 75% of the unsecured creditors who vote it becomes legally binding on all the unsecured creditors, including those that did not vote and prevents any further action being taken.
In most cases the costs involved in an IVA are far less than those involved in Bankruptcy and they usually provide a far better return to the unsecured creditors involved.
An IVA usually makes arrangements for payments due to creditors to be on deferred terms and for far less than the full amount of debt. After an IVA is complete it is common that the debt may not be paid in full, but all unsecured creditors included within the IVA can not chase for the remaining balances once it is complete.
The majority of IVAs are based on 60 monthly contributions but can also include a lump sum payment for example from releasing the individuals share in a property, life or endowment policies.
Monthly payments made into an IVA will cover the fees for putting together the proposal and also supervising the IVA as well as making the monthly payments to the creditors. Once an IVA has been agreed and set up the creditors are required to freeze all interest on the debts, they are prohibited from pursuing the debts and also prevented from progressing legal action in relation to those debts except with the consent of the court.
To find out more about this type of debt solution and to receive a FREE no obligation review, please click here
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