The IVA is a great solution for those people with debt. It is known to make people debt free after the whole agreement process. It usually takes up to 5 or 6 years, depending if there are assets that need to be released which may take until 12 months to be done. It is known to help a lot of the people who are qualified, because although it may take a long process, it is still worth it because of the written off debt that may happen after the duration of the IVA. However, the IVA is not usually understood quite well, and a lot of people still have queries when it comes to the topic. Here are some of the few frequently asked questions that will help you learn more about the IVA.
1. Who is allowed to have an IVA?
– Anyone who is qualified to have an IVA can be accepted. Those residents of Northern Ireland, Wales, and England can apply for an IVA. Also, those people with unsecured debts of £15,000 who owe to two or more creditors can apply for an IVA. For people in Scotland, there is also a similar agreement called the protective trust deed. The IVA is available to all individuals who have a stable income even if you are self- employed. Traders and partners can apply as well. However, this does not guarantee that you can already get approved because it all depends with the creditors’ approval on the said agreement.
2. How much does an IVA cost?
– The cost will depend on the monthly repayments you should pay for with the agreement. Usually, it does not cost below £170. Also, since the agreement will be at your advantage, it will depend on your current financial situation, because you will only pay monthly for what is affordable to you. This shall be agreed by the creditors, you and also the insolvency practitioner (IP).
3. What does an Insolvency practitioner (IP) do?
– The IP will be the one to supervise the whole agreement process. The IP will be the one to help you understand the complicated details of the arrangement, and also he will be the one to speak on your behalf with the creditors. The IP will also be the one to draft the proposal, and convince the creditors regarding the IVA. The IP has the crucial work in the process because the approval will be dependent on the proposal that you two will be working on. The IP should also be qualified and licensed to do insolvency work such as this arrangement.
4. Will an IVA affect my credit?
– Yes. At the duration of the term of your agreement, your credit cards and stored cards will be inactive. Also, you will not be allowed to make unsecured debts until the term is done. Since this will take until 5 or 6 years, you need to think through if you can pay for the repayments and not be able to get debt through your income. The only cards which will be allowed are prepaid cards.
5. Will I get approved?
– The approval of your IVA depends on the proposal that you will be drafting with the IP. So you really need to provide the important and accurate details regarding your current financial situation, including your debt, assets, and other factors so you can draft a compelling approval. If you are not approved, there are still other alternatives you can use to help you in your debt. Check out the website IVAPlan to know other debt management options that can help you.
6. What if my creditors not be in favor of the agreement?
– In case that your creditors will not be in favor, then you can still have bankruptcy as an option. Also, you can do informal arrangements between you and your creditor which can also help in your debt management. However, this can be avoided if the proposal will also be beneficial to the creditors, so you really need a good insolvency practitioner for you to be able to get approved.
For more details about the IVA, you can check out the website http://www.ivaplan.co.uk/.