Could An Iva Be The Solution To Your Debt Problems?

Do you have unmanageable debt? If you qualify you could take out an IVA.

An Individual Voluntary Arrangement is an arrangement between you and your creditors. It is legally binding and is organised via an insolvency practitioner.

Creditors owed 75% of your debt must agree to the IVA. You then make affordable repayments for a five year period after which, if you have met all payments, you are discharged and all of your outstanding debt is written off. Assets accumulated during the five years such as equity in property may be used to reduce the final debts.

You must owe at least 15,000 pounds to three or more creditors in unsecured debt though in some circumstances an IVA can be arranged with less than three creditors.

You must have the means to make reasonable payments towards your debts, which means that either you or your partner must be in gainful employment which provides sufficient income to meet your day to day needs, repay your secured loans such as your mortgage, and cover your debt repayments.

Using your income and outgoing figures you will be required to show a realistic proposal of how you plan to meet set repayments. A meeting will be held with your creditors and they will either accept or reject your plan. If the creditors of 75% of your debt agree to the proposal then remaining creditors are legally obliged to accept too.

You will not qualify for an IVA if you have assets such as equity in your home that could be used to repay your debts.

Although an IVA does not mean you will lose your home, any equity in the property that accumulates during your IVA will likely be used to make payments towards your debts. An assessment is made during the final year of the IVA.

Important to note is that debts are not written off until being officially discharged from the IVA. Failing to make all levels of payment means that creditors can resume action including starting bankruptcy proceedings against you. Therefore, you need to be confident that you can make the repayments over the five year period.

by: Bobby Roughfield

POST COMMENT

How to Purchase Cheap Costume Jewelry Motivation For Paying Off Your Debt Debt Settlement Attorney - How to Locate an Attorney Specializing in Debt Settlement Euro Debt Fears Resurface Liquid Debt The cloud of Debt Digging Out Of Debt How To Reduce Your Living Expenses To Pull Out Of Debts Purchase Cymbalta 20 mg Debt Despite Best Efforts Why Purchase and Do Short Sale on Property? Smoke And Mirrors Of Debt Reduction Phoenix Debt Settlement - How to Handle Needs and Wants While Going Through Debt Settlement