How to Approach an IVA?

iva advice

First you know about How does Iva approaches ? An Individual Voluntary Arrangement offers a secure way for people struggling with multiple debts; provided that you are eligible, this arrangement can save you from bankruptcy. And, you can set up an IVA as per your financial situation, which can surely provide you with some relief. But, you must carefully consider how you can benefit from an IVA before proceeding with this arrangement. Regardless of your circumstances, you can set up an IVA with a simple procedure. The information below includes all you need to know about How to Approach an IVA and how to apply for an IVA it.

How does an IVA Help You Clear Your Debt?

Since it is a formal agreement, you cannot proceed with an IVA all by yourself. You can set up this arrangement only with the help of an Insolvency Practitioner (IP). The IP would require your financial details, including income, expenditure, and assets, to prepare a repayment plan. You must provide them with any financial information that they ask from you.

You can pay off your debts with an IVA with affordable monthly payments. Your IP will put forward your repayment plan to the creditors and negotiate with them to get it accepted. Once your application is approved, you will not have to deal directly with your creditors.

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You have to make the payments to your IP, who might keep a part of it as their fees. After that, they will distribute the rest of the amount among your creditors. And the amount that each creditor receives would depend on how much you owe them.

You can clear your debts within 5 years with an IVA. And, once you complete the arrangement, the remaining debt will be written off.

How to Set Up an IVA?

You can set up an IVA within a short time with the help of an IP. But, before that, you must make sure that it is the best solution for you. Then, you must proceed with the following steps:

Apply for an Interim Order

Are your creditors planning to take legal action against you? Then, you can apply for an interim order at the County Court through an IP. Once you lodge the interim order, your creditors cannot start legal proceedings against you after that. Then, you can proceed to set up a repayment plan.

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Evaluate Your Finances

After the interim order comes into effect, you can evaluate your finances with your IP. You must give them the details of all your existing debts. To prepare an affordable payment plan, you must provide your IP with all the financial information they need. This would help them understand your financial situation accurately. Based on that, they would prepare a report for presenting to the court. And, the court will then decide whether you can get an IVA.

Create a Proposal and Present it to the Creditors

After the financial evaluation, you need to create a proposal for your creditors. It must include all the terms of the arrangement, including reducing your monthly payments. You can also ask your creditors to extend your loan so that you can pay it off. Your IP will help you create a detailed proposal and present it to your creditors in a meeting. And, you can attend this meeting, if you want to do so. If at least 75% of your creditors approve of the arrangement, the arrangement will come into effect.

Are You Eligible for An IVA?

You must fulfil the following eligibility criteria if you want to get an IVA:-

  • The applicant should reside in England, Northern Ireland or Wales. Residents of Scotland can go for a Trust Deed.
  • You must have multiple unsecured debts amounting to £5,000 or above. If you owe less than that to your creditors, you must look for other solutions.
  • You must have proof that you are struggling to repay your debts.

You might have other viable options even though you fulfil the aforementioned criteria. Also, you might get disqualified, even if you are eligible for this arrangement. So, you must always consult an adviser before getting an IVA.

Which Types of Debts Can You Clear with an IVA?

You can include pretty much all unsecured debts in your IVA. Moreover, there is no limit to the number of debts you can include in it. People commonly get IVAs to clear bank loans, credit card loans, and council tax arrears, among others.

Apart from that, you can also use this arrangement to clear certain types of secured loans. You can know more about this by reaching out to a reliable expert.

Speak with Our Experts for Advice

Debt can have adverse effects on your life unless you act quickly. We can help you find the best solution for your debt situation. So, reach out to our expert for How does Iva approaches and some reliable debt advice in uk.