What is an Individual Voluntary Arrangeemnt and How Does it Work?
An Individual Voluntary Arrangement
(IVA) is a formal agreement between an individual and their creditors to pay back some or all of their debts over a set period of time. It is a legal process available in the United Kingdom and is an alternative to bankruptcy.
Who can do an Individual Voluntary Arrangement?
An IVA is typically suitable for individuals who have debts that they cannot afford to pay off in full and who have a regular income. The process involves working with an Insolvency Practitioners like X-debt who will negotiate with the creditors to agree on a repayment plan that the individual can realistically afford. This repayment plan usually lasts for 5-6 years, during which time the individual will make regular payments to their creditors.
Benefits of an Individual Voluntary Arrangement
Some benefits of an IVA include:
- It allows the individual to avoid bankruptcy, which can have serious consequences such as the loss of assets, damage to credit rating and potential restrictions on future business activities
- It provides a formal, legally binding solution to manage debts and enables the individual to make a single monthly payment to their creditors
- Interest and charges on debts may be frozen
- A proportion of the debt included in the IVA may be written off
Are There Pitfalls?
However, there are also potential drawbacks to an IVA. For example, the individual may have to release equity from their property, and they may have to pay more over time than they would have in bankruptcy. In addition, an IVA can have a negative impact on credit rating.
Overall, an IVA can be a useful option for individuals struggling with debt, but it is important to seek professional advice and consider all options before deciding whether it is the right solution for your situation.
How Will X-debt Deal With Your Debt Problems?
At X-debt we provide IVAs but will only recommend this route if it is a suitable solution for your debt problems. If we feel a different solution is more appropriate, we will signpost you in the right direction. We will not try to 'Sell' and Individual Voluntary Arrangement' if it isn't right for you.
Never Feel Pressured
It is important that, whoever you choose to assist with your debts, offers an unbiased opinion and you should never feel pressured or coerced in to agreeing to an arrangement you are not comfortable with.
At X-debt we will discuss your situation in a calm and friendly manner. Please do feel free to get in touch without obligation and we will help to put your mind at ease. You can contact us here
or call us during normal office hours on 0161 787 3400
. You can also complete our debt calculator on all pages of our website.