How to Apply for an IVA (Individual Voluntary Agreement)?

apply for an iva

The IVA acts as a legal connection between you and the creditors. People only opt for the IVA when they are unable to bear the debt stress or facing many difficulties in giving back the credit amount. After judging all the financial situations, you need to apply for an IVA. 

Before the procedure takes place, you need to seek help from a person who practices insolvency. On the other hand, you must find out whether the IVA is really good for you or not. Along with that, you must also select a good and reputed organization for accepting the IVA. 

How to Apply for an IVA?

A few steps will help you to apply for an IVA. So, it is obvious that you check thoroughly before taking any type of steps.

Step 1: Make an Approach to the Court

To apply for an IVA, somehow you have to seek help from the court. The court will give you the order of interim. This order is added to the IVA to stop any type of further proceedings that can come from the creditor. Moreover, if they try to bankrupt you, then this order will show its game-changing power. Here, your personal practitioner will help you out. 

Step 2: A Series of Conversation regarding the Finances

Your personal practitioner will also play a crucial role here. He/she will observe the entire financial situation. In this situation, the IP will place more focus on activities like incomes, getting rents and others. On the other hand, to apply for an IVA, the assets will also be included in the act. 

Step 3: Creating a Proposal 

To initiate the application process, you must approach a certain company regarding the IVA. Thus, crafting a specific proposal is necessary. Don’t worry, the practitioner will do all the job for you. The introduction to some of the vital ingredients into the proposal goes like this: 

  • The complete financial statement of assets, incomes and expenditures. 
  • A proposing setback to all the terms and conditions for the IVA
  • Vital reasons for opting for the IVA and details regarding the creditors

The most specific and correct proposals are to be made by this. Now, the proposals must be accepted by the creditors. If you somehow disobey the advice of the IP, then the situation might deteriorate and go in the favour of the creditors. 

Step 4: It’s all up to the Creditors

Again, the IP will play game-changer here. He/she will place the proposal in front of the creditors. After that, if necessary, the IP will apply some real convincing ideas to make them agree to your IVA. Once done, the application for the IVA will be accepted. It is better to be present when the meeting or the discussion will be held. If there are more than one creditors present, the voting pole might be necessary. If most of the creditors vote for the majority, then the proposal will eventually work out. 

Apply for an IVA — Right or Wrong?

At the very beginning, a certain realization of legitimacy regarding the IVA is necessary. Here are some conditions that will help you to realize the matter before you apply for an IVA. 

  • Having debts more than ten thousand pounds
  • Multiple creditors at a time
  • Want to avoid facing the creditors, and threatening letters
  • Getting support for any kind of mortgage

If you are feeling confused about this matter, then discuss with your personal IP. Try to listen to what he/she is trying to say. Only after that, make your own decision. 

The Costings and Risks that IVA Involves

To afford an IVA, the entire matter will be a bit expensive in nature. On the other hand, your IP must be experienced and qualified. He/she must know how to handle certain tough situations while dealing with the creditors. Roughly, it can be said that the IVA costs about four to five thousand pounds. 

Talking about the risks, you might have to keep your home in a re-mortgage situation. This can only be possible when your residence has a good equity value. In other situations, there will be an option for selling the home, and then repaying the remaining debt. 

In the case of the absence of your home equity, the other items like cars, savings and other intangible assets might also be included. Thus, reducing all the risk factors regarding the debt repay. 

IVA — The Ultimate Debt Solution 

IVA has a greater advantage of paying back any amount of debts that are present in the form of credit. The creditors will never bother you if you are under the surveillance of the IVA. Somehow the time is limited to 6 years, but it’s enough time to manage the debts. 

After you apply for an IVA, the creditors will be forced to take the limited monthly amount that you are liable to pay. The amount will only be part of the debt with no other additional fees and charges. Therefore, their demand for extra money will go in vain, eventually.