Individual Voluntary Arrangement – The UK Debt Solution
Individual Voluntary Arrangement The UK Debt Solution
In these times when people rely on credit to get by, more and more people are finding themselves deep in debt. Sometimes so deep they cannot get out without radical help. For those people who happen to live in the UK, there is the option of an individual voluntary arrangement, which can be the perfect solution to some situations. It is usually a better alternative to bankruptcy and will work when your situation is too serious for debt management.
What is An Individual Voluntary Arrangement?
An individual voluntary arrangement is a formal agreement, only available in the UK, that is made between your creditors and yourself in which you agree to pay back a percentage of the money you owe to them. This is done over a five year period and is a binding legal agreement as long as you keep up the repayments. These legally binding agreements are commonly referred to as IVAs and are not available in countries outside the UK. It is a way of writing off a large part of your debts that you cannot afford to repay.
How Does It Work?
You can apply to any good debt company that provides this solution to get a free review. They will go through your finances in detail before getting back to you with a proposal if that is a suitable option. Proposals will be drawn up for an individual voluntary arrangement using questions that you answer about your financial situation. You need to check the proposals over and sign them before returning them to your insolvency practitioner (IP).
An Interim Order is then applied for through the courts. Creditors can no longer take legal action against you after an Interim Order is in place. A meeting will be set up with the creditors and you should make it a point to attend.
How Does It Get Approved?
For an Individual Voluntary Arrangement to be approved, creditors representing 75% of the monetary value of the debts must approve of the plan. If one creditor represents more than 25% of the monetary value and he refuses, your IVA will fail. If certain creditors do not vote it is assumed they are voting for the arrangement. These are in marked contrast to a debt management plan, which is an informal solution with no way to compel creditors to join the plan.
IVAs are legally binding, which has advantages in your favour, but it also means that you cannot just change your mind about it if your circumstances change. The creditors cannot change their minds either once they have voted. If you fail to keep up your repayments then the creditors can come after you again and you could even be made bankrupt. It is very important that you hold up your end of the agreement.
Will I Be Able To Get An IVA?
These arrangements are designed for very serious debt situations and are therefore only suitable for people in certain circumstances. People likely to be approved for an IVA are likely to have debts of at least 15,000 and be struggling to keep up with repayments. They will typically be considering bankruptcy but considering possible alternatives. For an arrangement to work and be approved you will need to have a source of income, preferably from regular employment. Debts that can be included in the plan will be unsecured and they must be to a few different creditors.
Anyone in the UK who is in debt and considering bankruptcy should always approach a debt management company first, so see if there are any alternative solutions that may have less drastic and long lasting consequences.
Wear Trendy Prescription Lenses to Set Style Statement Scents That Attract Women - Best Scents *Exposed* Instantly! Holiday Season is the Perfect Time to Check Up on Your Parents Cosmetic Surgery Treatments Astro Aries Personality Golden triangle with Haridwar tour packages – Choose the Best Tour Package Liposuction A Step Towards Beauty Egypt Expected To See An Influx Of British Tourists Taking Scuba Diving Holidays This Winter All About Affordable Wedding Decors Whenever the kids Easter break is, spend it having plenty of fun Finest Wedding Party Professional Photographer Regarding Auspicious Celebration Working In The Business Idea - Do You Have What It Takes To Succeed In A Home Business? The Gift Mine That Is TRE Jewelry, For Unique Gifts by:Brooke Harrod