March 13, 2019 Last updated March 8th, 2019 2,216 Reads share

IVA – How Does Its Repayment Work, Its Benefits, Eligibility and Other Considerations

Image Credit: Stockunlimited

Most of the IVAs usually last for a set of the time period. It is generally considered to be a span of either five or six years at a turn. However, once your IVA is over, you will no longer need to pay for the debts to your creditors. Also, you are supposed to receive a completion certificate from your insolvency practitioner. It is important to be aware of the fact that the IVA (Individual Voluntary Arrangement) can attract certain risks as well.

Before you jump on to seek the benefits of IVA, you need to sign up at first and then fill up the form you obtain from there. However, you will be able to avail the form absolutely at a free of cost. Knowing the right kind of debt solution is mandatory and IVA website is here to guide you all along the way. It assists you to find out whether a government-backed debt scheme would be the right choice for you, or you may go for some other way out, depending on all your debt options and your financial circumstances. Therefore, we house user-friendly financial advisors who are there to sort out all your financial troubles and pick up the right deal that fits your requirement and endure your growth at the same time. Besides, you need not worry about your security since IVA assures you with a legally binding agreement.

A brief note on IVA

An IVA is basically regarded as an agreement that is made with your creditors in order to pay off your debts over a set time period. It is a legal debt solution that is created abiding all the legal terms. In short, it gets approved from the court and thus, one should stick to the same by all possible means. However, one must not mislead IVA, a fork of insolvency with that of bankruptcy as they are no way similar. A qualified person usually seems to set up an IVA, considerably known as an insolvency practitioner. Definitely, a fee for the IVA will be charged in return wherein the average fees usually go around £5,000. Though a lot of people these days are misleading to go to a debt management company. Well, let me tell you the basic difference between the two! Both of them function similarly. The only difference between them is that a debt management company sounds to be a little more expensive than that of an insolvency practitioner since the former levies a fee on the top of the latter in other cases.

How do the repayments work?

It is always recommended to frame out a repayment plan with your insolvency practitioner while you decide to get an IVA. This plan is consequently meant to be put before the creditors, and on settling for the agreement, there shall be a set amount scheduled for each month. Your insolvency practitioner will receive your payments directly (the monthly repayments). Later, this money gets distributed among the creditors.

Is there any provision for your debts to be ripped off?

In case, the payments into the IVA do not seem to be sufficient to pay your debts in their full amounts, the rest will be written off. However, this must only happen on the basis of advice received from the insolvency practitioner.

Some benefits of an IVA:

  • IVA is basically regarded as a timely deal and you ought to repay it for an IVA period, for five years at a set.
  • IVA is legally binding. It means that the creditors generally require to stick to the bond and you won’t be chased for the debt once the IVA comes on the force.
  • Lastly, the creditors will accept only the repaid debts while the rest of the same would be written off.

Conditions to take an IVA:

It is basically dependent on your creditors. These IVAs are particularly meant with the purpose of lessening one’s burden of debt. Even there are several creditors who do not accept the IVAs with payments less than £100. Besides, if you have got any valuable asset, creditors will not bother to look about any of your spare income or regular income. This is because your asset will be utilized to sell or repay the debt in return. Summing up together, a person is burdened with debt but having some regular income or any asset will be able to qualify for an IVA.

Your IVA shall stay on record – How long?

Your IVA is supposed to remain on your credit file for six years from the day it began. Therefore, in case your IVA has been five years old, its record shall stay there for a further span of 12 months or 1 year after the IVA ends.

When are you eligible for an IVA?

One can take IVAs to repay a wide range of common debts. They base Ally range from that of personal loans to overdrafts, rent arrears or catalog debts as well as mortgage shortfalls. Regarding your tax debts, you can also opt to take IVAs as assistance. These Deals basically include income tax, council tax arrears, court fines, student loans, and national insurance contributions. Apart from these, if you still want to fetch the completed list of debts that IVA covers, you shall get it in the Citizens Advice official website.

Considerations to make before opting for an IVA:

While you opt for an IVA, it is important that you come up with a detailed budget so as to ensure that you will be able to repay your preferred amount comfortably. It is usually recommended to take a good deal of time so as to make sure that you are able to conduct the required amount of research for choosing a reputable IVA provider. In addition to that, a reputable service provider ensures that you are able to fetch the best possible terms with the creditors out there.

 bitcoin currency sign

Yatin Arora

Yatin Arora

Read Full Bio