Individual Voluntary Arrangement (IVA): A Suitable Option for Paying off Your Debts

What is an IVA?

An Individual Voluntary Arrangement, or IVA for short, is a formal arrangement between you and your lenders/creditor companies that can help you pay off your debts within more flexible terms than your original lending agreement.

With the right support of a Debt Management Company or Insolvency Practitioner (IP), you put forward a debt repayment plan to your creditors, which will take the shape of what you can afford as per your current financial position.

When considering an IVA plan, you can either choose to make a one-time payment or prefer a 60-month repayment plan. Remember that an IVA is a legally binding agreement, hence it has its pros and cons.

Applying for an IVA

Before applying for an IVA, it is recommended to seek financial assistance or expert advice from a reliable online debt service/management company or financial adviser to help you find reliable solutions. Having professional support by your side is essential in terms of arranging the best IVA plan and later dealing with your lenders/creditors on better grounds.

If you are looking to get an IVA, then check this online IVA Plan website to reduce your unreasonable debts by up to 81% with an effective individual voluntary agreement.

IVA as an alternative to Bankruptcy

If you are wondering when to choose an IVA over bankruptcy, then you must consider the followings:

  • When you own personal property and assets that you don’t want to lose
  • When you have an established business that you don’t want to lose
  • When you are looking to apply for a power of attorney on behalf of someone
  • When you don’t want to sabotage your credit score history
  • When you are looking to avoid negative social impact
  • When you have spare income or reserves to pay off your debts

IVS are a more flexible option

When compared with traditional tactics of debt management, an IVA plan is considered a more flexible option to make debt repayment at affordable costs. Individual Voluntary Agreements help you negotiate with your lending institutions based on your circumstances & financial position. You can choose to make repayments on your terms & conditions.

Pros of IVA

The benefits of getting an IVA plan include:

  • You will have to pay back your debt at the agreed percentage.
  • You can be free from debt repayments for an agreed number of years.
  • IVA is a legally binding obligation, hence your creditors will stop calling.
  • You will not have to sell your personal property or assets.
  • You will not be declared bankrupt.
  • IVA is an affordable debt repayment plan.
  • You will have some sort of professional support by your end.
  • For unsecured debts, the contractual charges & interests will be frozen. 

Risks Associated with an IVA Plan

With every great solution, there comes a few unavoidable risks. It is imperative on your end to understand the risks involved with the IVA plan.

IVA is not a suitable option if your circumstances change rapidly. This way, you wouldn’t be able to make payments. If IVA fails, your creditors and lenders could file strict action against you. You could end up declared bankrupt. And the worst part is that you will also have to pay fees to your debt service provider or insolvency practitioner even if an IVA doesn’t bear fruit for you.

Learning more about personal insolvency

The best books about getting out of debt might be a good place to read up on the pros and cons of difficult debt solutions, and read about the inspiring stories of those who have managed to escape the clutches of creditors through any combination of frugal spending, financial planning and insolvency schemes.

IVAs are promoted by the government as a more flexible and less costly alternative to bankruptcy which can provide a win-win to both sides of a troubled debt. For the creditor; the opportunity to receive some pennies in the pound on their debts, to assist with recovery. For the borrower; a more realistic and credible payment plan which should relieve some of the pressure of an unsustainable debt burden which was spiralling.