Individual Voluntary Arrangements—A Formal Alternative to Avoid Bankruptcy
Friday, September 12, 2008 11:56
First established by the Insolvency Act 1986 in the United Kingdom, the Individual Voluntary Arrangements (IVAs) is a legally binding agreement with the creditors and can be as flexible as an individual’s own circumstances, which is based on capital, income, third party payments or a combination of these.
It constitutes a formal repayment proposal presented to a debtor’s creditors via an Insolvency Practitioner. Usually, an IVA compromises only the claims of unsecured creditors, leaving the rights of secured creditors largely unchanged. People can try to arrange an IVA with the help of a licensed insolvency practitioner, when there is no real prospect of paying off all your debts.
The amount of money debtors can realistically afford to pay back over a period of time, which is often around 3 to 5 years, should be worked out at first. The IVA proposal is agreed once 75 per cent in value of those creditors agree and all debts as well as the future interest on them will be frozen then. If there are any business associates or friends and family involved in those voting, a second count is required to be taken and 50% of non-associated creditors must approve it.
One of the most important advantages of IVAs over bankruptcy might be the control the debtor has over their assets. However, along with the multiple advantages IVA can offer, there are according things people need to pay special attention to and not everybody can be qualified to apply for the use of an IVA. It’s necessary for the debtors to turn to licensed insolvency practitioner with great reputation for more information and relevant advice before considering making a move. More and more consumer debtors with overwhelming levels of debt are now turning to specialist debt advice organizations that provide an alternative to bankruptcy with the use of an IVA. Cleardebt.co.uk is just one of the professional advice companies offering on-line service.
Check it out at if you need any further information. Don’t let your debt become a problem.
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