If you’re exploring the use of an Individual Voluntary Arrangement to get on top of your debts, it’s vital that you arrive at an agreement that suits you.
An Insolvency Practitioner will advise you about your options in terms of an IVA, which allows you to pay your debts back in a way that is more manageable to you than your current credit agreements. If an IVA is successful, it can form a real step forward in getting your finances into better shape in the future, but in order for it to be a success it has to be an agreement that is realistically manageable to you.
Your income, outgoings and assets will all form part of the decision making process when working out what to agree to. You will need to be honest and realistic with yourself when proposing what repayments you can make.
Once you’ve worked out the terms of the agreement that you want to propose, your Insolvency Practitioner will present this to the court. Generally a meeting will then be held at which your creditors will decide whether to accept the arrangement. As long as you keep to the agreement, your creditors cannot pursue your debts through the courts while the arrangement is in force, as it is a legally binding contract.
One of the main advantages to using an IVA rather than going down the road of bankruptcy, is that an IVA generally gives you more control over what happens to your assets. This can be hugely important, particularly when it comes to assets such as your home if you own it. You should therefore discuss what should happen with the assets with your Insolvency Practitioner when deciding on the terms of the IVA that you wish to propose.