It has been observed that the financial condition of UK has continued to be perilous and it has become really common among the people to find themselves deep down in debt. The IVA process is a solution by which an individual can find significant solution for keeping the creditors at bay. In this article we are going to look at the common features offered by IVA as well as the benefits and risks that might be involved in the process.
Now, firstly, we need to know is what actually an IVA is. This has become an increasingly popular way of addressing the unsecured debts. This process can be a complete and consolidated debt solution for those who are having a substantial level of debt which amounts to £10,000 or more.
The IVA helps an individual for making an arrangement along with the people and company that owes money to enable a legally binding settlement. Any other payments of the individual are completely closed and one affordable monthly payment is scheduled for the individual which is paid throughout the agreed period. The time span is mostly for five years and after that period of time, any other outstanding debts will be cleared. This will provide the individual the freedom to start a completely new financially burden-free life after clearing off the debts.
The monthly repayments can be as low as £125, which is mostly less than the minimum payments that are made on the loans or credit cards. The total costs for setting up the IVA and the fee for the insolvency practitioner will be completely included within the single monthly payments that are provided by the debtors to the creditors.
Now, we need to know how the overall process of individual voluntary agreement works. According to www.ivaplan.co.uk, the first step of any IVA involves the preparation of a proposal and it needs to be accepted by the creditors. In this stage, depending on the assessment of the individual’s present financial condition, the insolvency practitioner will offer the terms and regulations of the complete agreement. The insolvency practitioner will then request a meeting along with the creditors for putting forward the proposal and negotiating the agreement on behalf of the debtor.
After that a vote will take place. If more than 75% of the overall creditors agree to the rules and regulations of the agreement, then it will be informed by the insolvency practitioner to the court regarding the acceptance and the arrangement will be made legally binding. Now, a major relief for the debtors is that the creditors will not be able to make any enforcing actions against you until the debt arrangement period is complete. If the voting process fails or the creditors are not agreeing to the regulations then the insolvency practitioner will request for another meeting after renegotiation with the creditors. Once again there will be a vote in place and if more than 75% of the creditors agree to the terms, the agreement will be made legally binding. Talk to a financial advisor to find out more.