How does an IVA work?

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How does an IVA work?
IVA stands for an Individual Voluntary Arrangement. It is a debt solution provided by government legislation to help people who otherwise might have to declare themselves bankrupt. Not everyone qualifies for an IVA and any proposal has to be overseen by a registered Insolvency Practitioner.

Do I qualify for an IVA?
When someone has debts that they cannot afford to repay, they may be able to offer an IVA to their creditors through an Insolvency Practitioner. They will need to demonstrate that they have insufficient assets to sell which would enable them to clear their debts. Thus homeowners with equity in their property that exceeds their unsecured debt would probably not qualify for an IVA because on paper at least, the debts can be repaid.

Can I afford an IVA?
Creditors will want to know the amount of disposable income a particular debtor may have. This is calculated by deducting from a person�s monthly income all reasonable living costs. Once all household and personal expenses have been accounted for, the income less expenses creates a figure called the disposable income. This amount of money can be offered to the creditors and would usually last for 5 years. Creditors representing at least 75% of the debt total need to agree to the IVA offer and it becomes legally binding on all creditors.

Why would creditors accept an IVA?
This arrangement t can benefit debtor and creditors alike. For the debtor an IVA represents a binding arrangement that enables them to repay some of their debt based on what they can afford. Interest on debts has to be frozen and creditors are not allowed to take any action against the debtor. At the end of the IVA, creditors have to write off all remaining debt that is outstanding. There is thus a definite end-point to the debt. For the creditor, the advantage of an IVA is that they are getting some of their debt back whereas in bankruptcy it may well be that they will see all their debt written off.

Is an IVA for me?
An IVA is a formal declaration of insolvency, and as such is not entered into lightly. Insolvency Practitioners or debt solutions companies are on hand to advise on all debt solutions and the implications of an IVA in the individual circumstances of a particular debtor. But when an IVA is the right solution it creates an opportunity to structure debt repayments in an affordable way with a fixed end in sight.

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IVA.com is rated 3.9 on a scale of 5 based on on reviewcentre.com.
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A useful site that is free to use and full of useful... - by , 01/03/2008
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Good Points

Very informative with lots of useful information. A lot of reviews on firms that really help understand their customer service and ability. The reviews appear to be genuine as they offer interesting insights. Didn't really use the the map but looks impressive!

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The site is a bit cluttered and sometimes hard to navigate around.

General Comments

A useful site that is free to use and full of useful information about IVAs. If you are thinking of doing an IVA then this is a must use site.