Who Can Have an Individual Voluntary Arrangements (IVA)?
In light of the present liquidity crisis and credit issues, debt help is something that everybody seems to be in need of. There are many debt solutions that are being offered to deal with the prevailing problems. One of these is the Individual Voluntary Agreement which is one of the alternatives to bankruptcy.
When you have outstanding debts, an IVA helps you in reaching a settlement with the creditors for the compromise of these debts. An IVA actually binds you legally to your creditors for the payment of the debts, even if it is for deferred terms and less than the actual amount that is due.
An IVA is an ideal solution for the people who are on the verge of bankruptcy and are unable to repay their outstanding debts. Hence, IVA is the alternative to bankruptcy, and you would also have less to lose if you can have an IVA. IVA does sound like the best win-win situation for the creditors as well as borrowers, but IVAs are not appropriate for everyone and hence are not applicable on everyone.
Before applying for an IVA, it is important for you to seek the impartial and unbiased advice of insolvency personnel who is experienced. There are certain criteria on the basis of which it is determined whether or not an IVA would be the right solution for you. If you are in a situation in which you are reaching bankruptcy and cannot afford the publicity associated with it, then the right option for you is to go for an IVA.
An IVA is based on the fact that you would be making monthly contributions from your income to cover the outstanding amount of debt that you have. So, this means that in order to be eligible for having an IVA, it is important for you to have an income that guarantees that you would be making the payments.
Other than your credit records and personal loans, there are other factors that influence whether or not your IA gets accepted or not. The place where you live also plays a role because there are some places where IVAs are available. In order to be eligible for having an IVA accepted, it is necessary that the person should not be able to make the payments on credit card or personal loan.
Other than that, the debt size has to be at a certain level. The minimum debt usually has to be £15,000. If the minimum amount is less than the limit, then an IVA would not apply and some other debt solution would rather be applicable.
You also have to have a stable employment and have to have enough money on a regular basis for living expenses. This is because it has to be showed that the debtor can afford the IVA payments. You would also need to specify your spending patterns and that you would cut down on social expenditures. You might also have to include any assets that can be sold and from which money can be extracted.