IVAs or Individual Voluntary Arrangements can be a great way for you to get your problem finances under control. These arrangements can stop debts from spiralling out of control, and give you the chance to start rebuilding the foundations for a healthy financial future. However, there are a number of choices that an IVA will involve, and these can have a substantial effect on its success or failure.
If you’re considering going down the route of using measures such as an IVA, you’ll need the legal services and advice of a licensed Insolvency Practitioner. An IP will help you to take the decisions involved, and will be best placed to explain to you the implications of the various choices at hand.
In order to use an IVA, you will first need to make a proposal to your creditors regarding the debts you owe them. This proposal forms the basis for the agreement, and will outline the terms that you will need to stick to for the full term that the arrangement is going to run. Your creditors will have the choice as to whether your proposal is acceptable to them or not, and your IP will help you to come up with one that is likely both to appeal to them and to be effective from your point of view.
It is imperative that your proposal is actually going to be manageable for you as time passes. If the agreement fails, i.e. if you fail to keep up with the required payments, your creditors will again be able to pursue you legally for your outstanding debts. For this reason it’s well worth thinking carefully about the payments you think you can make as part of the IVA.
The creditors concerned may also request changes to be made to the proposal before they will agree to accept it. If this happens you will need to work out, along with your IP, whether the requested changes are going to be acceptable to you.
Sometimes having an IVA may require you to release equity from your home, for example. In most cases an IVA is used for people who have few remaining options, for example bankruptcy, and so this may be a price worth paying to stop your situation from getting to this stage.
The main thing to bear in mind if you are pursuing an IVA, is to make sure you get all of the information and guidance you can before going ahead with anything, that way you’re much less likely to have regrets.