With the credit crunch rearing its ugly head, more and more UK residents are finding themselves struggling to pay off their debt. Because of this, IVAs (Individual Voluntary Arrangement) seem to be gaining in popularity. But what is it? An IVA is a formal, legally binding process allowing debtors to pay off their unsecured debt by making a payment proposal to their creditors under the guidance of an Insolvency Practitioner (IP).
One of the main advantages of an IVA is that it takes a load off your shoulders when it comes to repaying your debt. In addition, all your high interest rates are frozen, and you make repayments for 60 months. You also get to keep your home, car, and you get the chance to rebuild your credit rating.
How do I organise an IVA?
Firstly, you approach and IP, you will assess your financial situation and decide on a repayment plan which suits your needs and budget. Your IP will send an application form to the court for an Interim Order. During this time no creditor can take any legal action against you.
Before your IVA application is approved, a creditors meeting will be called, which you should attend. In this meeting the creditors will be called upon to vote for or against the IVA arrangement. If the creditors vote for the IVA, it gets approved immediately. If 25% vote against the IVA, the meeting will be postponed for a later date.
Lately, online IVA applications have become popular. Now you can enjoy fast and secure IVA services online.
Once I have made my final payment, what happens?
Once you have made your final payment, your IP will issue a ‘Statement of Completion’ within 3 months of your final payment. You will then be declared debt free.