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The recent financial crisis that seems to have taken its grip all around the world has lead to a lot of people getting bogged down with increasing levels of debt. The level of debt can become increasingly difficult to manage and this has lead to an increase in IVA Debt Solutions being arranged. What does an IVA actually do to help resolve peoples debt problems though?
An Individual Voluntary Arrangement (IVA) is a formal repayment agreement between a debtor (person owing money) and their creditors (the people who are owed money). As people attempt to rid themselves of the debt that they have mounted up, these agreements are becoming increasingly popular.
An IVA is a legally binding agreement and allows a debtor to make reduced monthly payments to their unsecured creditors in order to pay off a percentage of what they owe for the duration of the agreement. These solutions are usually made with a time period of five years.
During the IVA, the creditors are legally bound to freeze the interest on any outstanding debts and to cease adding late payment charges to the debtor’s account(s).
The creditors are also not allowed to get in touch with the debtor in any way when an agreement is set up. Any correspondence must be passed through the appointed Insolvency Practitioner’s office under the terms of the Individual Voluntary Arrangement.
Once an IVA has been successfully completed any outstanding balances must be written off by the creditors, in many cases as much as 75%! Meaning no more debt for the people involved.
The size of the monthly repayments to the IVA are calculated with the help of the debtor providing the relevant documentation and are based on what the debtor can realistically afford throughout the term of the IVA.
To qualify for an IVA the following minimum requirements need to be met.
The amount owed has got to be at least £15,000.
3 or more different named creditors.
The person owing money must be receiving a regular income (not entirely benefits).
If you meet the criteria mentioned then you could significantly benefit from arranging an IVA Debt Solution so you should take some time to look into your available options.