Many people in debt take out an IVA or individual voluntary arrangement in order to ease their financial situation by reducing their overall monthly repayments.
In some circumstances it may be possible to settle an IVA early.
If you come into money and have excess cash flow that you previously didn't have when you initially took out the IVA, it is important that you inform your IVA supervisor.
The IVA supervisor will analyse the situation and inform the creditors as they will need to know where the money originates from and that there is evidence that it is available to settle the IVA.
The process surrounding this settlement is called a variation meeting in which the IVA supervisor will call a meeting with the creditors to put forward a new proposal which encompasses the new sum of money acquired for debt repayment.
If the creditors accept the new proposal, there is a time limit by which the money needs to be paid, usually around 3 months.
Once the creditors have received the funds, the IVA will be complete.
If you are in debt and would like to discuss you options, whether it is an IVA, a debt management plan or bankruptcy, you should speak to a debt advisor soon.
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors that you will pay back as much debt as you can afford over a fixed period.
Any remaining unsecured debts will subsequently be written off.
If accepted by 75% of voting creditors (by debt value), an IVA will give you complete legal protection from all unsecured creditors, even if they did not vote.
A typical Individual Voluntary Arrangement (IVA) lasts for five years and is supervised by a licensed Insolvency Practitioner who must ensure it is fair and reasonable for both you and your creditors.
Required invalid Example of an IVA:Example only, all costs and fees are unique to your own individual proposal John can afford to pay £400 each month towards total unsecured debts of £60,000.
Over 5 years he pays back a total of £24,000.
After fees of £4,000, a total of £20,000 is paid to his creditors and the remaining £40,000 (66%) is written off.
Is an IVA right for me? An Individual Voluntary Arrangement (IVA) is available to those who have combined unsecured debts normally around £13,000 or more, owed to two different creditors or more.
An IVA could be right for you if you have a regular income and can maintain a regular payment towards your debts, but cannot afford your current payments as and when they fall due.
If you cannot afford a regular payment towards your debts, you could consider a full and final settlement or bankruptcy.
If you would like to speak to a Debt Release Direct advisor to discuss your options, you can call for FREE on 0800 019 7465.
What are the advantages of an IVA?
You will need to provide details of your income, expenditure and debts so that Varden Nuttall can write a full proposal to your creditors.
They arrange a creditors meeting where your creditors vote on whether or not to accept your proposal.
If accepted, you will then make a single monthly payment to your Licensed Insolvency Practitioner, who will be responsible for handing out a percentage to each creditor on a regular basis.
Providing you can keep up with your reduced payments, at the end of the IVA all of your included unsecured debts will be written off.
In some circumstances it may be possible to settle an IVA early.
If you come into money and have excess cash flow that you previously didn't have when you initially took out the IVA, it is important that you inform your IVA supervisor.
The IVA supervisor will analyse the situation and inform the creditors as they will need to know where the money originates from and that there is evidence that it is available to settle the IVA.
The process surrounding this settlement is called a variation meeting in which the IVA supervisor will call a meeting with the creditors to put forward a new proposal which encompasses the new sum of money acquired for debt repayment.
If the creditors accept the new proposal, there is a time limit by which the money needs to be paid, usually around 3 months.
Once the creditors have received the funds, the IVA will be complete.
If you are in debt and would like to discuss you options, whether it is an IVA, a debt management plan or bankruptcy, you should speak to a debt advisor soon.
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors that you will pay back as much debt as you can afford over a fixed period.
Any remaining unsecured debts will subsequently be written off.
If accepted by 75% of voting creditors (by debt value), an IVA will give you complete legal protection from all unsecured creditors, even if they did not vote.
A typical Individual Voluntary Arrangement (IVA) lasts for five years and is supervised by a licensed Insolvency Practitioner who must ensure it is fair and reasonable for both you and your creditors.
Required invalid Example of an IVA:Example only, all costs and fees are unique to your own individual proposal John can afford to pay £400 each month towards total unsecured debts of £60,000.
Over 5 years he pays back a total of £24,000.
After fees of £4,000, a total of £20,000 is paid to his creditors and the remaining £40,000 (66%) is written off.
Is an IVA right for me? An Individual Voluntary Arrangement (IVA) is available to those who have combined unsecured debts normally around £13,000 or more, owed to two different creditors or more.
An IVA could be right for you if you have a regular income and can maintain a regular payment towards your debts, but cannot afford your current payments as and when they fall due.
If you cannot afford a regular payment towards your debts, you could consider a full and final settlement or bankruptcy.
If you would like to speak to a Debt Release Direct advisor to discuss your options, you can call for FREE on 0800 019 7465.
What are the advantages of an IVA?
- Payments are fixed and agreed in writing at the start of the IVA.
- Your creditors will write off the remaining balance outstanding upon completion.
- Once your IVA is completed you will be debt free (excluding any secured creditors).
- Although you may need to remortgage or release equity in your home, you are usually allowed to keep your property.
- The IVA won't jeopardise any reasonable assets you have.
Necessary vehicles are usually excluded. - You are legally protected by the IVA terms.
Once accepted your creditors cannot take further action providing you stick to the agreement. - If your circumstances change a new proposal (typically called a variation) can be put to your creditors to take the changes into account.
For example a reduction in income or unemployment. - Your IVA will not be published in a local or national paper.
Your friends and family need not find out. - Business owners can continue to trade under an IVA.
- Unlike in bankruptcy, there is normally no requirement to declare that you have had an IVA on future loan applications.
- What are the disadvantages of an IVA?
- Payments usually continue for 5 years.
- If your IVA fails, you may be in a similar or worse financial position than before, or could be made bankrupt by your creditors.
- For the duration of your IVA you will not be able to take out any further credit without the consent of your Insolvency Practitioner.
- Your IVA will adversely affect your credit rating for up to 6 years.
- IVAs appear on the insolvency register.
You will need to provide details of your income, expenditure and debts so that Varden Nuttall can write a full proposal to your creditors.
They arrange a creditors meeting where your creditors vote on whether or not to accept your proposal.
If accepted, you will then make a single monthly payment to your Licensed Insolvency Practitioner, who will be responsible for handing out a percentage to each creditor on a regular basis.
Providing you can keep up with your reduced payments, at the end of the IVA all of your included unsecured debts will be written off.
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