An individual voluntary arrangement (IVA) is a formal insolvency process that allows you to reach an agreement with your creditors to pay back your debts over a set period. If you are struggling to repay your debts and are looking for a bankruptcy alternative, an IVA could be the right solution for you.
However, before you decide to go ahead with an IVA, there are a few things you need to know. In this article, we will go over the 10 most important things you need to know about IVAs. By the end of this article, you will have a better understanding of how IVAs work and whether or not an IVA is a right solution for your debt problem.
- You must owe at least £7,000 in unsecured debt to be eligible for an IVA.
- You will work with an insolvency practitioner (IP) to create a proposal for your creditors. This proposal will include details about your debts, income, and expenses, as well as the proposed repayment plan.
- Your creditors must agree to the proposal for it to be accepted. At least 75% of your creditors, by debt amount, must vote in favor of the proposal.
- Once the IVA is in place, you must make regular payments to the IP, who will distribute the funds to your creditors.
- Your credit rating will be affected during the IVA, and the IVA will also appear on your credit report for six years.
- You will not be able to take on additional credit during the IVA without the IP’s approval.
- Any assets you own may be at risk during the IVA, depending on the terms of the agreement.
- You may need to release equity from your home if you own one, although this is not always the case.
- If you fail to make the agreed-upon payments during the IVA, it may fail, and you could be made bankrupt.
- If you complete the IVA successfully, any remaining debt will be written off.
In conclusion, an IVA can be a viable solution for individuals struggling with debt. However, it is essential to understand the terms and potential risks involved before deciding to proceed. It is best to seek professional advice from an insolvency practitioner or debt advisor to determine if an IVA is a right option for your specific financial situation.
Protecting Your Assets During an IVA
An IVA may be a solution for those struggling with debt, but it’s important to understand the potential risks involved. One significant risk is the possibility of losing assets during the process.
Understanding Asset Risk
When you enter into an IVA Advice, your assets are potentially at risk. This is because your creditors are looking to recoup their money, and they may be willing to go after any assets you have in order to secure payment. However, the level so, we’ve discussed a couple of key aspects of an IVA, including what it is and how it works. However, there are a few more things to consider before deciding whether or not this is the right solution for you. Let’s dive deeper into the topic and explore some additional important factors to weigh up.
What Assets are at Risk during an IVA?
However, in reality, not all assets are at the same level of risk. For example, if you own a home with a mortgage, it may be more difficult for creditors to force a sale in order to recoup their money. It’s important to consult with an IVA provider or financial advisor who can help you understand what assets