Bankruptcy has been the answer to countless people’s financial difficulties for a number of years now. It has been listed that bankruptcy is in the top 5 life altering negative things one could go through. The alternative to this is called an Individual Voluntary Arrangement. An IVA is a legal agreement through the county court and the debtor to pay off debts over a predetermined time. The length of term is usually about 3 to 5 years with high monthly payments. The rest of the debt is written off thereafter. Some IVA’s however, are made on the idea to use a lump sum offer to creditors rather than monthly payments. Many IVA’s use both though.
An Individual Voluntary Arrangement is not for everyone. For the most part, an IVA is the answer for those who have a lot of extra money to spare at the end of the month or for individuals who have a large lump sum of money which they could use to pay their creditors and write of the rest of their debt. For those considering starting an IVA, it usually costs upwards to around 2500 dollars. In the end though, IVA’s do not look as bad as bankruptcy and could be the answer to those who can’t afford to have a bankruptcy on their credit.
When you decide to start the IVA process, one must attain an insolvency practitioner, or IP, who is authorized to write an IVA. This person usually is an accountant. After an IVA is worked out between the debtor and the IP, the proposal is sent to the creditors. From there you get an “interim order” from the county court while your IVA is being looked over. This stops creditors from beginning bankruptcy procedures without the courts permission. From here, your IP meets with your creditors to agree upon terms of the IVA. After agreement, the IP supervises the debtor while making all of the monthly installments. After completion of this process, your debts are paid off in a shorter period of time and you don’t have a bankruptcy on your credit.