So, you owe your creditors a certain sum of money and now you are having difficulties in catching up with the payments? With these financial troubles, your enterprise is in danger of bankruptcy and you have a lot to lose. Where do you turn to for aid?
Individual Voluntary Arrangements (IVA)
In a nutshell, IVA is a legal agreement between the payer and the creditor for the former to pay his debts to the latter at an amount which he can afford on a monthly basis within a certain period of time agreed upon. This period lasts usually relatively longer such as in five years. During these years, creditors are prohibited from increasing the payment terms. Upon making the final payment, the rest of the debts is disregarded.
Sounds better than declaring insolvency, right? But can it do you more good than harm? Are you qualified to have an IVA set up for you?
Down here are some fundamentals and essentials about IVAs for you to take a look at before you decide to sign up for one.
Under IVA, you will only have to make practical and realistic monthly payments. The amount will have to be based on what you can actually afford. You have much greater chances of keeping your assets, such as your house and your car, for as long as you are able to maintain the mortgage payments and any other kinds of loan which you owe. Your creditors are not allowed to include these assets in the agreement.
In addition, your creditors cannot make any other legal move against you such as bringing the case to court. They are not even allowed to contact you regarding what you owe them.
IVA may have to stay on your credit file for the next six years but you will not have to endure as many financial and credit restrictions relative to having been bankrupt. Hence, on the face of it, IVA seems better than bankruptcy.
Sounds good so far, right? But are you suitable to enter into IVA? Let us find out next what the risks are.
While being allowed for realistic monthly payments is part of the advantages IVA can offer you, these will go on for five years. Depending on how you look at it and how undemanding or burdensome this might be for you, these payment terms under IVA can be considered a disadvantage as much as it can potentially be easy.
IVA is a deal or contract between you and your creditors and it is not built on trust which is not a legal criterion to set up for an IVA. You may be permitted to keep your assets but may also have to be obliged to release a considerable part of your equity. This may happen at the start of the agreement or toward its end.
Should you fail the IVA along the way by not adhering to the terms, it will still be bankruptcy which you will fall off to.
Weigh the factors and circumstances of your current situation and get professional IVA Help & Advice now and find out more about the arrangement. If you ever come to the decision of moving on in an IVA, choose your IVA provider wisely.