Individual Voluntary Arrangements or IVA

It often happens that you cannot manage debts on your head and you become unable to pay or clear of your debts due to some inevitable circumstances. In that case an IVA can help you to repay back your loan or debt amounts in easy installments and also to get some relaxation to write off standing amounts. Individual Voluntary Arrangement is a kind of formal agreement made between lender and borrower. In this agreement it is agreed that borrower who owe money to lenders would make reduced payments towards the total amount of taken as loan and pay off a percentage of what a borrower owe them. An IVA has to be arranged by a licensed professional called Insolvency Practitioner. An IVA is usally made for five years.

The main purpose of an IVA is t o help those who have really financial difficulties in managing their debt. Through this a legal agreement is made in court where both the borrower and the lender would agree upon a fixed amount to be paid as monthly installments by the person to the lender. Once the last installment is paid about the said or agreed amount other outstanding debts are removed automatically. The monthly payments are based on the affordable scale of the borrower. Sometimes in many cases IVA can write off almost 65% of your total loan amount.

How the IVA works? In this process you have to apply for IVA to a legal Insolvency Practitioner. They would ask you for a questionnaire where you would be scrutinized strictly about your financial stability and status. Once they are convinced that you are eligible for the process they would forward it for an IVA. The matter will then be resolved in a court. The installment payment modes are usually paid for five years so that the borrower doesn't face too much stress in clearing the debts in installments. If you have multiple lenders and owe each of them some amount of money the Insolvency Practitioner would look after the installments and redistribute them to lenders.

One of the benefits of IVA is that once you go for such arrangement no lender has the right to sue any legal action against the loan you borrowed from them. However if you don't pay the installment agreed matters can be worse for you. The IVA also depends a lot on lenders. In some cases they don't want to agree for such arrangements due to inuring loses of their business.