IVA is the abbreviation of an Individual Voluntary Agreement. The IVA debt help is a legal agreement between a loan owner and the creditors to pay back the loan at affordable rates. The period of loan repayment lies within 5 to 6 years. You are free to choose the payment method either in monthly instrumentals, lump sum or by a combination of the two ways. Effects of Individual Voluntary Agreement
Approval of Individual Voluntary Agreement is through an insolvency practitioner who receives the payment directly and divides it among your creditors. The insolvency practitioner keeps some money for the payment of the fees charged.
Repayment Plan
The unpaid amount of money, if unsecured, is done away with after the period of loan repayment is over. Therefore, insolvency practitioners’ charges are lower than that of credit management companies. If loan repayment is not complete when the repayment time expires, the insolvency practitioner will give you relevant advice.
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Effects of Individual Voluntary Agreement on Businesses
New Business
When on Individual Voluntary Agreement, you can choose to start a new business. However, you should consider completing the debt first and build your credit score.
Existing Business
The introduction of an Individual Voluntary Agreement was a relief to business owners. During this plan, the creditors tend to make extra money over what they would initially make. Business owners are allowed to retain their business assets to keep their business running.
In some cases, you need to replace lucrative assets with inexpensive options to act as debt relief and pay the remaining balance through your Individual Voluntary Agreement.
How to Overcome It
Use a personal calculator to determine precisely the amount of money you can afford to pay monthly. Then, submit it as a monthly installment. Do so before you commit yourself to IVA debt help. By so doing, you can successfully finish repaying the debt by the end of the 6th year and avoid bankruptcy.
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How to Apply for IVA Debt Help
Visit The Court to Acquire an Interim Order
With the advice from your lawyer, apply for an interim to block your loan providers from auctioning your properties. The court order will give you time to set up an individual voluntary agreement. The order will prevent your creditors from acquiring a court order and try rendering you bankrupt.
Go Through Your Finances and Repayments
It would be best to go through your financial situation together with your lawyer. These situations include; monthly salary, assets, and savings.
Your insolvency practitioner is going to help you come up with a repayment schedule. Ensure that the agreement is favorable for both parties so that the credit companies approve of it.
Develop a Proposal
Draft a proposal together with your lawyer. Then, take the proposal to court and your creditors. The request should include the repayment timeline, repayment method, and the amount payable.
Wait for A Response from The Creditors
Your loan providers will hold a meeting together with your practitioner and have a vote. If 75% of the panel agrees to your request, those who voted against it will have to comply with it.
Benefits of Individual Voluntary Agreement
Below are the main benefits of applying for an Individual Voluntary agreement to repay your loan:
- Your Assets Remain Secure – Creditors cannot auction your properties, such as your homes and cars, while in the agreement.
- It Is Affordable – Whatever you pay depends on your monthly income, assets, and savings. Therefore, it will be an amount that you can afford without affecting your lifestyle.
- It Is Legally Binding – During the agreement period, your loan providers cannot take any further legal action against you.
- You Only Pay the Agreed Amount – You are only required to pay the amount stipulated in the IVA. This amount is higher than what the loan providers will receive by rendering you bankrupt.
Conclusion
IVA debt help comes in handy to help individuals who find difficulties in paying back their loans. It protects people with loans from harassment by creditors and gives them more time to settle their loans.
Visit an insolvency practitioner today to help you develop an agreement between you and your creditor to enable you to settle your loan smoothly.
Jaime is a professional author for Technical Writers, with a range of experience in all things business-related. Not only has he acquired a degree in English Literature, but he has also worked in the debt collecting industry in addition to journalism.
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