Insolvency IVA

Introduction to Insolvency IVA

Insolvency means that you are not able to pay your debts when they are due. Unfortunately, the current slow-down of the economy has left many people with this inability to pay off their debts and leaves them wondering what the best way to handle this is. Unpaid debt can become problematic, especially when the debt collectors start to call demanding payment. Although you may feel like just hanging up on them and never answering the phone again, there are a few solutions that can help you get a grip on your debt problems. Most people would love to be able to free themselves from the debt that they managed to accumulate but they do not know the different options available like bankruptcy and insolvency IVA.

Insolvency IVA Options

There are several options that you can choose from when considering a solution for your debt. First, bankruptcy is one option to consider applying to the courts for. The court system will determine what amount you will need to repay your creditors. Many people do not like the stigma that goes along with bankruptcy and are looking for better options. If your debt is not very high but you still feel that you need to take care of it or you have less serious debt to consider, a debt management plan may work for you. This is where you work one-on-one with your creditors to come up with a solution that works for both you and the creditor.

One of the most common debt solutions used is an insolvency IVA. This is an individual voluntary arrangement, where the creditors come together to create an agreed upon plan that will work for both you and your creditors. An insolvency IVA s a binding agreement and consolidates all of your loans and reduces them into a more manageable amount. This repayment amount is put into a set monthly payment amount that lasts for an average of five years. Once the payments are all complete, all of the debt is considered paid in full.

Choosing an Insolvency IVA

Before choosing an insolvency IVA as your final option you should understand both the advantages and disadvantages of the insolvency IVA option.

  • By choosing an insolvency IVA, you will not have to include your personal property as part of the agreement like you do in bankruptcy court. This will help you protect and keep your home.
  • These agreements are binding and once they are finalised your creditors will no longer be able to contact you in regards to payment. No more nasty phone calls.
  • Once the final monthly payment has been made, your debt will be paid in full.
  • Insolvency IVAs will stay on your record for six years, just like bankruptcy, but you will not be prohibited from obtaining another loan or agreement. In a bankruptcy you are not allowed to obtain a loan after for a set number of years.
  • The payment agreement for an IVA is usually about five years and you will be bound to that agreement for the entire five years whereas bankruptcy only lasts for about one year.
  • An IVA, just like a bankruptcy, will remain on your credit record for at least six years after the final agreement was made.
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