Debt Management IVA

Introduction To A Debt Management IVA

An individual voluntary arrangement (IVA) entails coming to an agreement with the creditors who you owe money to. A debt management IVA is important when you feel that you cannot make debt repayments as per the original agreed terms with the creditors. Negotiating with the creditors can save you from going into bankruptcy as they may let you pay in a manner that will be convenient for you. This is a good way of writing off or lowering the debts that you have. In some instances, it is possible to pay to write off up to 75% of the debts.

Insolvency Practitioners

An individual voluntary arrangement is usually laid down by a middleman who is licensed to carry out such an arrangement between a creditor and their debtor. The middleman is known as an insolvency practitioner and is an expert in debt management. The insolvency practitioner negotiates all the conditions with the creditor. During debt management IVA, a practitioner will offer the creditors a debt repayment solution which has already been agreed with the debtor in the hope that they will accept. Hence it is crucial to get a practitioner who is well versed with negotiations.

The History Of IVA

Though the use of IVA to negotiate with creditors has only been in the headlines recently, it has existed since 1986. The recent financial crisis has forced many people to turn to IVA which has brought a rise of around 25% per quarter. The agreement is mostly made for three to five years with many opting for the longer period. The creditors are glad to receive part of the debts that they are owed and will therefore agree to avoid declaration of bankruptcy. In most instances, payment of interests and charges on the debts that are unsecured are frozen. With this kind of agreement, the debtor will only pay the amount of money that was borrowed without any other extra charges. This is usually spread over a period of up to 5 years.

IVA And Privacy

In order to qualify for an IVA, the unsecured loans must total more than L15,000. You should also have the ability to pay L240 each month after deducting your living expenses. An IVA is a good debt management option because the agreements are not published in the newspapers unlike cases of bankruptcy which are always published in the public domain. A debt management IVA is an informal form of debt management; thus, it does not have negative effects like those that are brought about by bankruptcy.

An IVA will not bar you from holding any public office or working in the military or the police department. It also cannot be used to remove you from the directorship of a public company. You will still be permitted to run a checking account in the usual way and the only service that you will not be able to access is an overdraft facility. Another important factor is that once you are under an IVA, your creditors will not be able to bother you with letters or telephone calls as they are barred from communicating with you in any way.

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Debt management IVA