Individual Voluntary Arrangement (IVA)
Clear Debt is at the top of many individual’s list of things they wish to accomplish. The problem is they aren’t sure how to go about achieving this goal. An individual voluntary agreement or IVA is one option that people should consider when they wish to clear credit cards and other debt that is plaguing them. What exactly is this and how does one go about setting up an arrangement of this type?
What Is an Individual Voluntary Agreement?
This agreement is a legally binding arrangement between a debtor and his or her creditors and allows the debtor to settle debts over a period of time, typically five years. The exact term of the arrangement is determined when it is first established, and monthly payments are based on what the debtor can realistically afford to pay. Any debt that remains at the end of the arrangement must be written off by creditors, and three-quarters of the debtors must agree to this arrangement before it may be implemented.
What Are the Advantages of an IVA?
An individual voluntary agreement allows the debtor to repay some or all of his or her debt over a period of time without further interest being accrued on this debt. Furthermore, creditors may not take legal action as long as the debtor upholds his or her end of the agreement, and no property is at risk with this type of arrangement. The entire process is very discreet, making it the ideal options for individuals who wish to keep information about their financial situation private to protect their career.
What Fees are Involved?
Individuals often wish to know how much they will pay to enter into an agreement of this type. There are two types of fees charged by insolvency practitioners. Nominee’s fees are charged for any work done by the practitioner to put the agreement forth to creditors, including the drafting of the proposal to be submitted to the creditors. Supervisor’s fees are charged by the practitioner for any work that is carried out once the arrangement has been agreed to by all parties and is typically capped at 15 or 20 percent of the monies realized.
Professional debt advice is of great help when a person finds they are struggling to meet their obligations. An individual voluntary agreement is only one method of achieving this goal, and there are numerous others. Some people find bankruptcy is the best solution for their situation, and others benefit from debt management help. No matter which option is selected, relief is possible. Learn more about the different solutions offered today to find the one that is right for your needs.