Did you know that each year roughly 78,000 people start an IVA? For many people, an IVA is the most viable way to get out of debt. However, despite this fact many people are still unfamiliar with the term.
So, exactly what is an IVA? And how do you know if it’s the right option for you? If you want to learn the answer to these questions, and more, then you’re in the right place.
In this article, we’ll give you a crash course in everything you need to know about an IVA. Let’s get started!
What is an IVA?
An IVA is an acronym that stands for individual voluntary arrangement. Essentially, it’s an agreement that you make with your creditors that is formal and binding. In it, you agree to pay your debts back over a certain period.
If the court approves your IVA, then your creditors must adhere to it. While an IVA does provide you with a degree of flexibility, it’s also a bit risky and expensive. As such, you should consult an expert first to make sure that it’s the right choice for you.
How Does an IVA Work?
An IVA needs to be set up by an insolvency practitioner, who is a lawyer or accountant. The insolvency practitioner will charge you a fee in exchange for dealing with the creditors.
Together with your insolvency practitioner, you’ll create a repayment plan to serve your creditors. The creditors then meet and vote to decide whether or not to accept your repayment plan.
If it’s approved, then you will begin paying back your debts over five to six years (usually).
How Do You Find Out If You Qualify for an IVA?
Usually, those applying for an IVA will have unsecured debts that equal £7,000 or more. On top of that, they need to have some form of monthly income as well as a monthly surplus that equals £100 or more.
For many people, an IVA is a perfect solution for creating a flexible plan that can put them back in control of their finances. For others, it’s a risky venture that could result in more debt or legal consequences.
So, how do you find out if it’s the right decision for you? We recommend contacting a professional and telling them about your specific circumstances.
They can advise you on whether or not an IVA is a right option for you. If you need a recommendation, then visit becomedebtfree.co.uk.
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We hope this article helped you answer the question, What is an IVA? It’s important to remember that an IVA isn’t right for everyone. As such, we highly recommend consulting with an expert before you try pursuing it.
That way, you’re certain that it’s the best choice for your current financial needs. Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep exploring to find more content that you’re sure to love.