Is An Individual Voluntary Agreement An Option For You?

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The number of people opting for an Individual Voluntary Agreement is rising in the UK. An Individual Voluntary Agreement otherwise known as an IVA, is becoming increasingly popular for people who have found themselves in financial difficulty and owing money on loans. These people have normally run out of resources and cannot obtain another loan to help them get back on track.

An IVA is a legal binding contract that is made between creditor and borrower to pay back some of the debt owed to the creditor. The procedure is managed by an insolvency practitioner. An IVA is a better option than Bankruptcy.

To be able to qualify for an IVA you will need to have debt of £15,000 or more. The insolvency practitioner will look at how much the borrower can afford to pay each month and if the creditor agrees then a contract will be drawn up for them to sign. Once they have both signed the agreement they are both in a legal binding contract and the creditor will usually end up losing money, however he is no longer allowed to chase the debtor for the money owed.

You will not be eligible for an IVA if you do not work. If you have been accepted for an IVA you will be given a time period to pay back the debt of 3 to 5 years once that term is over the debt will be written off. In fact as long as all payments have been met on time you could find that 70% of the debt owed has been removed.

IVA’s are not to be entered into lightly, they can have a damaging effect on your credit history and stop you from obtaining credit for many years to come.

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