Friday, December 5, 2008
Understand Individual Voluntary Arrangement
Individual Voluntary Arangements or IVA is an agreement between any individual and their Creditor. It is nothing but an alternative to Bankruptcy which brings an individual to an agreement with the people and firms whom they owe money to repay their debts, paying off certain percentage of outstanding debts over a period of time.
Rules for IVA these days are very flexible by nature. By applying for IVA it will always mean that you will get lump sum upfront and then series of monthly payments. People can negotiate on different arrangements with their creditors with a proper co-ordination of experienced insolvency practitioner. It is nothing but a loan repayment scheme in actual sense that is how much you pay back is calculated by your income verses your expenditure. When it is agreed then the same scheme becomes the part of legally binding contract.
With the help of IVA you can also stop your Creditors forcing you into bankruptcy. But it is not a cake walk. You have to remember some important things before you do this. The most important being that is 75% of your creditors have to agree with IVA. Secondly, if you miss a repayment by any chance the arrangement then becomes null and void. Lastly, you should have enough income and assets for your creditors so that you can very easily cover the repayments.
IVA is mostly needed when you think you are facing bankruptcy. With the help of IVA you get more control over your assets. But with some good things comes bad things too. There are some minor disadvantages of IVA too. As we can see the current economic conditions which is stumbling down, the bankruptcies are expected to increase. As a result of this the fees of IVA will be drastically increasing.
If you think you are into bankruptcy, then make sure you take complete help of IVA but with that always make sure that you are quite capable of fulfilling your repayments or else you will be in soup.