An IVA And It’s Implications
When considering an IVA. You should, however, consider the results of An IVA and it’s implications. Ensure you understand the impact that an IVA has on your circumstances.
IVA’s have a positive and negative impact on you, depending, therefore, on your lifestyle.
An IVA is a legal, obligatory agreement between an individual and their creditors.
An Individual Voluntary Arrangement, impacts on an Individual in a helpful way:
- IVA’s apply to Individuals with £15,000 or more unsecured liabilities to pay;
- Only a suitably qualified Licensed Insolvency Practitioner acts as supervisor of an IVA;
- Members of HBG Advisory will support the Individual to prepare a proposal for creditors approval;
- Upon completing the proposal for approval. Then a meeting of the individual creditors is arranged;
- The team at HBG Advisory deal direct with the Individual creditors;
- Creditor queries remain directed to us at HBG Advisory;
- Usually, creditors of the individuals tend not to attend the creditors meeting unless a seriously contentious issue remains unsolved. Creditors votes may, therefore, be posted rather than attend to vote.
- 75% of the voting creditors remain required to approve the proposal at the meeting then appoint the supervisor to commence the legally binding CVA agreement;
- Once the IVA proposals are approved, an IVA then draws a line on the individuals unsecured creditors. An agreed monthly payment then is paid by the supervisor from the monthly figure the Individual pays into the IVA;
- The amount paid to creditors’ divided proportionally, depending upon the amounts due to each of the creditors’.
- Unpaid liabilities remain written off, once the CVA closes. Then allowing the Individual to restart from a new base;
- Family Homes remain protected as a condition of the IVA;
- The footprint of having had an IVA, however, remains on your credit file for one year after the completion date;
What is an IVA?
- Only one single payment:
- IVA consolidates unsecured debts into a single payment usually made monthly. The payment must, however, be an affordable amount as it takes the place of previous payments to creditors.
- Predetermined duration:
- Usually, payments up to 60 months allowed. Once completed, the IVA then ends, and you start again, financially, DEBT FREE from all previous liabilities.
- Guaranteed legal protection:
- Once IVA agreed, creditors action ceases.
- Freezes’ interest:
- Creditors legally required then to cease interest charges, ensuring your debt frozen.
- Protects your assets:
- An IVA protects your assets from aggressive Creditor. Creditors, therefore, are not able to sell your house when in your IVA which is agreed.
- “No Disclosure”:
- Unlike Bankruptcy, IVA’s not advertised in the London Gazette,
- Total solution:
- Beginning IVA places, you on a path for debt freedom. Upon completion, your IVA frees you then from unsecured debts,
- Protects your income:
- An IVA remains a formal alternative to the Bankruptcy. This helps such people as Police personnel and people who professionally are not allowed to go bankrupt.
- No shame:
Positive aspects of an IVA outlines how it then enables someone to regain control of their financial circumstances while being ring-fenced from Creditors. An IVA controlled and maintained avoids Bankruptcy.
Negative IVA Consequences
Each IVA has downsides, depending on circumstances and IVAs are individually unique, and so varies from each IVA.
- Damage to your Credit Rating:
- IVA is no different. The IVA is then marked on the applicant’s credit file and remains on their credit file for 6 years.
- Legally Binding:
- IVA – legally binding agreement. Regarded as a benefit, the creditors are then bound legally by the IVA and difficult to change.
- The IVA requires supervision by an Insolvency Practitioner on behalf of the Creditors; Cooperation and disclosure vital as this could then fail the IVA.
- A Ridged State:
- The Creditors then expect the applicant to maintain their contributions as agreed with the Creditors’. Any changes in events, then the IP may reduce payments by 15% on his own. Any more then requires a variation meeting arranging. Substantial modifications to IVA payments are then not easy to agree.
- An IVA may be an agreed single one-off payment. Usually, the IVA lasts 5 years or longer. Ensure you can, therefore, maintain the agreed payment plan.
- Then the IVA monthly payment must be affordable and not set knowing you will fail when agreed. Remember, the object remains, therefore, to relieve financial pressure and clear the decks.
For further help with an IVA and it’s implications, please click on MEET THE TEAM.
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