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An IVA And It’s Implications

An IVA and its implications.When considering an IVA. You should, however, consider the results of An IVA and its implications. Ensure you understand the impact an IVA has on your circumstances.

IVA’s have a positive and negative impact on you, depending, therefore, on your lifestyle.

An Individual Voluntary Arrangement impacts 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 Practitioners acts as supervisor of an IVA;
  • Members of HBG Advisory will support the individual in preparing 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 directly 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 serious dispute 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 IVA 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 is divided proportionally, depending on the amounts due to each of the creditors.
  • Unpaid liabilities remain written off once the IVA 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 remains on your credit file for one year after the completion date;

An IVA And It’s Implications – What is an IVA?

Positive effects

  • 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 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 to cease interest charges, ensuring your debt is frozen.
  • Protects your assets:
  • An IVA protects your assets from aggressive creditors.  Creditors, therefore, cannot 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 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 are professionally not allowed to go bankrupt.
  • No shame:

Positive aspects of an IVA outlines how it enables someone to regain control of their financial circumstances while being ring-fenced from creditors. An IVA controlled and maintained avoids bankruptcy.

An IVA And It’s Implications – Negative IVA Consequences

Each IVA has downsides, depending on circumstances, and IVAs are individually unique, 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 IVA legally binds the creditors, which is difficult to change.
  • Scrutiny:
  • The IVA requires supervision by an Insolvency Practitioner on behalf of the Creditors; cooperation and disclosure is 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, 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.
  • Duration:
    • An IVA may be an agreed one-off payment. Usually, the IVA lasts 5 years or longer. Ensure you can therefore maintain the agreed payment plan.
    • Budgeting:
    • 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 THE TEAM AT MBG ADVISORY.

To contact HBG Advisory:

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