If you are someone who has not been able to pay off their debts on time, then you might be looking at losing out on your assets and being declared bankrupt. However, all is not lost, and you can still continue living your life if you choose to do an Individual Voluntary Arrangement (IVA). And if you do not know what an IVA is, then the below information should come in handy.
Long Time Period
An IVA consolidates all your existing debt and divides it into monthly installments lasting for 5 or 6 years. The interest for the period is usually done away with. In addition, a part of your debt will be written off. An IVA can only be passed and considered legal if at least 75% creditors agree to it.
No Legal Action
During the period IVA is in effect, no creditor can take any legal action against you. In fact, they may even be barred from talking to you. And if the pressure of so much debt had been mentally exhausting for you, not being constantly hounded by creditors because of the IVA will definitely improve your mood and outlook on life.
When it comes to credit score, you will have to agree to certain limitations. Firstly, you will only be allowed credit of up to 500 pounds during the period IVA is active. And until and unless you repay the loan and end the IVA, you are very unlikely to regain your credit score. Plus, IVA will be mentioned in your credit file for a period of up to 6 years.
During the IVA period, a licensed insolvency practitioner will always be on your side to support you. In fact, the practitioner will ensure that they guide you through the IVA process so that you complete it as quickly as possible.
Even though the term period of the IVA is said to be around 5 or 6 years, it is something that is not written in stone. After all, your financial position can change during these many years. As such, if you think that you need to change the terms of the IVA, you can do so provided the creditors also agree to it.
When you don’t pay your debts, your home may be taken over by the creditors. But because you signed the IVA, creditors can no longer even touch it. However, you may have to remortgage your entire property at least 6 months before the IVA ends. In addition, you will also be able to keep a few of your assets protected. For example, if you wish to keep your car, then the court can actually rule in your favor provided you can offer some extra IVA payments and the creditors are okay with it.
To get expert advice on debt problems, be sure to consult some good insolvency practitioners and case handlers in your area. Just make sure that they are properly licensed before you talk to them.