What is an IVA?
IVA stands Individual voluntary agreement.
Its is a legally binding arrangement between you and your creditors that requires you to repay a certain amount over a set period of time, usually five years. It enables for the cancellation of any unsecured debts at the end of the Individual voluntary agreement.
- For the next five years, you’ll only have to pay one low monthly payment.
- Your accounts’ interest is automatically frozen.
- Your debts’ outstanding balances are wiped off.
- It shields you from additional legal action from your creditors.
- The conditions of the agreement bind your creditors legally.
- There are no surprises: you know how much you’ll pay and for how long.
- Can be used to keep a bankruptcy case from being filed against you.
- There is a viable alternative to declaring bankruptcy.
- There will be no public notices because an It’s a private agreement between you and your creditors.
There are certain things associated with what is IVA? some of them are related to the queries associated with this topics some of them are:
Why IVA is the good option to consider if you are in debt?
There are lots of reason why Individual voluntary agreement is the best option to consider if your are having some debt to settle down. Although there are options too who are available but IVA is the best option because of the following reasons:
Its is a legal contract.
IVA is the best alternative for debt payback because it is legally binding between the debtor and the creditor. Legal binding means that the debtor will be shielded from creditors as long as he makes his IVA payments on time. The Debt Management Plan, on the other hand, does not provide legal protection to the debtor.
Can pause interest rate & charges.
Another advantage of moving off the Individual voluntary agreement for debt payback is that once it is granted, the interest and additional charges are stopped and the creditor cannot add them. This means that during the time a person is in an IVA plan, there will be no increase in debt. As a result, you will be able to make regular payments on your loan. There are a number of intriguing facts concerning Individual voluntary agreement payments that should be noted when learning about it.
It has a set end date.
One of the most significant factors to consider while repaying a loan is the length of the repayment period. No one wants to commit to a lengthy and uncertain debt repayment period. Another advantage of IVA registration is that it is usually for a set period of time, usually 5 to 6 years. However, in the event of a DMP, the situation is different because as the time period lengthens, the creditor may add interest. As a result, predicting when the plan will expire is challenging.
Individual voluntary agreement is authorized.
You can trust the plan more prominently as, if someone wants to go for the IVA plan he/she must go for the Licensed Insolvency practitioner, like Stepchange, Debtlines, IVAonline, etc. Whereas in the case of the DMP the case is different in this you can manage your DMP yourself or hire a third party to handle your creditors for you.
Wanna Know more about the Benefits of (Individual Voluntary agreement).
Who is eligible for an IVA?
The following are the minimum requirements for joining an IVA:
- At least £10,000 in unsecured debt must be present.
- At least three debts must be owing to at least two different creditors.
- The applicant’s income cannot entirely be based on benefits.
- Each applicant must agree to pay IVA instalments based on their ability to pay, but not on the amount of debt they owe.
- Rather of declaring bankruptcy, candidate must opt to enter an IVA. Whereas in Scotland bankruptcy is know as Scottish Trust Deed.
What am I supposed to if I want an IVA?
I hope by now you must have understand What is Individual voluntary agreement? and information about how and why its is the good option to choose if you are looking to settle your debt effectively and easily. Here at IVAOnline we try to resolve all your financial debt related issues in UK and guarantee you to make your financial journey much easier than previous.
Get your IVA advice today!
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