Individual Voluntary Arrangement (IVA) is the best debt management tool that has surfaced in recent times. In the well-developed money markets of the West where there is a strong bad credit repair infrastructure, this can prove to be a catalyst for economic growth. It can help convert the entrepreneurial spirit of people into positive foreign exchange inflows as banks will have more capital to lend since paybacks will increase through debt management tools. Non-performing assets will turn into cash-generating assets and IVA can prove to be a boon for the economy.
How does IVA help?
By applying for an IVA, a borrower gets into an arrangement with a debt consolidation company that all his loans be consolidated and converted into one single payment wherein the interest rate is lower and can help him or her restructure their finances better. Owing to recession or job changes, the average monthly inflow of a couple may reduce and then it leads to mental peace for borrowers who can then concentrate on their job or business based on the IVA worked out.
The advantage of an IVA is that your creditors are unable to pursue you for debt collection, once it has been worked out. So, you will effectively put an end to all those pesky phone calls at odd hours and save yourself from a lot of embarrassment. It has been observed that quarrels within a couple’s personal life increase when debts soar and it is only by liquidation of debts that things return to normal. Bad times do see a couple coming closer but debts can take things out of control.
IVA is legally binding
Yes, that’s the most important part of it and the monthly sum payable is given to an insolvency practitioner who distributes the amount amongst all lenders. You are not supposed to pay off all your debts and a certain amount of high-cost debt is written off while the remaining is converted into low cost debt that is converted into equated monthly instalments. IVA is also a form of insolvency but the difference is that you will be allowed to retain your house and it will not be confiscated by lending institutions.
IVAPros is one such company who offer sound financial advice based on your individual situation and their services are offered in England and Wales; while those living in Scotland can take advantage of a Trust deed which is quite similar to an IVA.
IVA also takes care of all sorts of late-payment surcharges and interest rates being charged to the account of the borrower who just wants to increase his internal rate of return. Collection agents often try to compensate the loss in one bad asset by levying high charges on borrowers who can be manipulated by threats of summons and county court judgements.
Procedure followed by an insolvency practitioner
Debt management professionals from IVAPlan.CO.UK first try to assess your net worth by taking into account your current income, cash in hand, savings and insurance if any and the liabilities you have. The difference between your liabilities and assets is what needs to be cleared with the help of professionals. These professionals will help cancel the high interest debt by convincing lenders that they are talking to borrowers and having a relook at your overall monetary situation. Once your case is in their hands, you can be pretty sure; you can come out unscathed as long as you can pay your debts on time.
Important things you need to know about an IVA
Failure to make the agreed payments can result in failure of the IVA. Your credit rating may be harmed for a period of six years and you will not able to take any further credit. If you are a homeowner, then you may be required to release equity from your property. However there are certain advantages as well. Interest rate and charges that are levied remain frozen for a period of five years. You can live with complete peace of mind and maintain your standard of living. Any kind of legal action or bankruptcy proceedings being initiated against you will be withdrawn.
Application procedure for IVA
The procedure is quite simple and you can apply online. Apprise debt management consultants of your situation by mentioning the loans you have in the form. After receiving your application, the experts at IVAPros will contact you and get all proofs of income and expenditure from you. They will create a file of your documents and it will be referred to insolvency practitioners who in turn will talk to lending institutions and work out a plan for you.
IVA is the best solution if you are struggling with home loans, personal loans, car loans, consumer durable loans and have been finding it hard to shell out so much interest on your loans. But IVA also comes with certain fees that you would have to bear, but this fee is more like an investment as it helps you save enormous amounts of time, money and energy. You can concentrate on your core line of work, be it business or job, and make more productive use of your time. Debt causes stress and you are more likely to be bogged down with issues related to debt than with your work.
So, it’s best to take the help of professionals and get back on track by taking expert advice in the face of severe monetary challenges and emerge successful, debt-free and unscathed from the whole episode. IVA works perfectly and its usefulness can be testified by many satisfied borrowers in England and Wales.
About IVAPros: Dedicated to solving the financial challenges being faced by its patrons, IVAPros is the brand owned by The Carrington Dean Group that specializes in debt management and consolidation for individuals and institutions. More than 14,000 people have successfully managed to extricate themselves out of chronic debt traps since 2001. Their highly experienced team of insolvency practitioners will help you find the best course of action given your current circumstances. Their differential diagnosis approach has helped their patrons to get the right kind of advice and emerge successful in life. They are registered in Scotland with company registration number SC225672.