Why Individual Voluntary Arrangements (IVA) Appear Ideal For Debtors

It is a troublesome deal to face the creditors in terms of paying off the debts in full. It could have been many times, when the debtor may find him or herself unable to deal with the impending debts due to various issues. The debtor should ideally get in touch with the legal experts to deal with these matters.

The process of IVA or individual voluntary arrangements depends on the part where a person needs to deal with the creditors in a proper way so that the individuals can share their problems with them and eventually acquire some benefits to repay the debts. In this process, the debtors can talk to the insolvency practitioners, who will help divide the money of the debtors to the creditors.

Rather than insolvency claims and bankruptcy issues, it will be better to control own assets through individual voluntary agreements (IVA). It is applicable only in the UK, where the local people can take the privilege.

The financial situation of a person is largely depended on this factor. Upon being tagged as bankrupt, a person may lose the claims from his or her own property, while IVA will let the person handle or control his or her own property and financial factors. A bankrupt person may not have his or her job to get money and earn to repay the debts, while IVA lets a person acquire all the things that he or she has.

In this process, the insolvency practitioner will contact the creditors. In this IVA process, the 75% of the debt should have been paid to the creditors. The rest of the amounts will be decided through this process. It will be applied to all the creditors, regardless of those who had earlier disagreed to the process.

In regard to IVA, there are two kinds of fee attached to the factor – the set up fee and payment-handling fee. The repayments should be continued within the due period of IVA, or else the process may get nullified. In that case, the insolvency practitioner may call the debtor as bankrupt, which may cause serious troubles to the people.

The benefit of individual voluntary arrangements (IVA) is that one can keep all the possessions and run a business during the payments. It means, one can keep on earning and pay off the debts in time.

However, if it is a business related loan, it may not get covered by IVA. IVA is a process strictly applicable for the common people and not the businesses. The common people may have taken individual loans even for their businesses, but it should not be connected to the sentiments of the businesses by any chance.

As per record, IVA can often last as long as 5 years. However, people can note the fact that there may be any length to it. Therefore, it is supposed to provide benefits to both the creditors and the debtors. With IVA-covered, a person can obtain up to GBP 500 as credit. But, just like bankruptcy claims, IVA also has a detrimental effect on a person’s credit rating. Therefore, upon setting a plan to seek the help of IVA, people need to talk to the experts so that they do not run into problems at a later period.

Why People Seek Government Debt Help and When – Find Out

Debt help on the behalf of the government is provided by the legal experts or counsels. People take loans for various reasons but over the period, they may not be able to repay them to the creditors. To get the loans or the money back, the creditors take various paths. However, not all of them may appear easy for the debtors. In this condition, the debtors can talk to the legal counsels. They can help the debtors solve the issues and save them from the grasp of the creditors.

The legal counsels certainly do not intend to solve the creditors’ problem all on themselves. They can only help the debtors solve them. There are usually four-fold ways to solve the problems. They are as follows –

  1. Help the debtors keep their work, money and properties but to stay debt free for four years
  2. The properties will not be sold or should not be sold in between the period
  3. The debtors will start repaying the loans as much as they can
  4. The rest of the loans should be written off once the maximum amount is paid

In between the period, the debtors will keep on paying the debts once at a time or according to their choice. The creditors should keep on receiving the amounts over the period before they write off the unpaid loan. It will be continued for four years under the UK government debt help program.

The complete process should be noticed by the legal counsel, because it is his or her duty to solve the problem or the burden of loan between the debtors and the creditors. The legal counsels can take steps in between the period according to the law and prevent the creditors from pressurizing the debtors or claiming and trying to selling off their (debtors’) properties to get back the money. The creditors are bound to receive as much payment as the debtors are able to repay in between four years of span and they cannot ask for more or put pressure on the debtors for more.

The question of writing off the debt under the UK government debt help program may appear somehow questionable but it is needed to be done after talking to both the parties. The debtors need to keep account of how much they have paid so far and the legal counsel will work as an arbitrator in this case, as the person will have to deal with both the parties in regard to settle the debts. The legal experts will make the creditors understand the basic factors of the programs before the creditor writes off the claims completely.

This is a matter that should be carefully considered by the experts or the legal counsels and both the parties – the creditors and the debtors. Both the parties need to understand the single point of dealing with the debt related problem dealt by the government and settle the deal between them properly. Staying in constant touch with the legal counsels in between the period (four years) will be beneficial for both the parties in this regard.