Debt management is not an easy task for many individuals. It is because we can’t take control on medical bills and similar things. However, it is important that debtors pay the loan amount as per the scheduled time to avoid any kind of trouble. If you find difficulties in managing your finances, you need to consider debt advice and solutions. Unfortunately, some debtors have to choose bankruptcy such that they could get rid of it.
Needless to say, no one intentionally wants to become bankrupt. If you have the possibilities to avoid the same, you can go with individual voluntary arrangements (IVA) program. It is another solution to debt help and advice when you want to avoid bankruptcy.
- Introduction to IVA
It is a formal agreement made with the creditor that repayment amount will be paid over an extended period of time. It means you will get a flexibility to reduce the monthly repayment amount and the duration will get increased. Eventually, it helps creditors in acquiring a profit from the debtor. If you are interested in individual voluntary arrangements (IVA), you need to understand the risks (if any) and hire an insolvency practitioner.
Since IVA is a form of insolvency but not a bankruptcy process, there is a need for a qualified person to make the agreement. In general, a lawyer or accountant helps in creating such a deal for which they ask a certain amount of fees. Note that you need to choose a reputed and reliable practitioner such that you can get authentic service at a reasonable price.
Once done, you have to share the details of your loan thoroughly. They will review the documents and understand it carefully before making a deal with the creditor.
- How does it Work?
When you have decided for making a formal agreement with insolvency practitioner, they will set up their account with the creditor. You need to pay the reduced loan amount to them which would be transferred to the creditor thereafter. This distribution is performed by the insolvency practitioners only as they keep a track of the record of your loan repayment.
Suppose there is a fee charged by these individuals, you have to deposit the money along with the loan repayment amount or follow the directions given by practitioners.
It has been noted that some debtors won’t submit the exact amount each month for loan repayment. In this context, the practitioner pays the amount and written off the figure what he has added to the repayment money. Also, he will discuss the same such that you remain aware of the fact. Note that all debtors could not get individual voluntary arrangements (IVA) because there are certain criteria that need to be matched such as income and assets.
- Final Words
Hopefully, you get to know the need for IVA and how to apply for it. If you want to avoid bankruptcy, this program could be a good choice.