These days, financial problems that seem dire are anything but rare. More of us than ever before are finding ourselves struggling to stay afloat, and in many cases facing bankruptcy. However, if you’re in this position there are more options than you may have thought, as long as you get the right bankruptcy advice.
Over time, the government have introduced a series of measures to help people from having to become bankrupt, and Individual Voluntary Agreements are one of those. The reality for your creditors is that if you go bankrupt, they will likely receive fewer of your funds owed than if they accept an IVA.
If you’re considering using an IVA, you’ll need to consult the services of an Insolvency Practitioner. These are professionals who’ve been authorised to carry out the legal processes associated with insolvency, and are well placed to advise you on what your various options are, if you feel you can no longer keep up with your outgoings. They will take into account such matters as assets that you may have, and should be able to make suggestions about the best way to get on top of your financial pressures, with any luck avoiding bankruptcy.
An IVA is a legal contract that you sign up to through which you commit to paying a certain amount to your creditors over a specified time period. The amounts are worked out according to what you can actually afford to pay, rather than on what you’ve agreed to pay in the past, and are therefore tailored to your own circumstances. Although your creditors will almost certainly receive less than the debt you owe them, they will be likely receive even less if you go bankrupt, and so they tend to be open to the agreements. Working out what you can actually afford to pay can be a task in itself, and it’s something that a good Insolvency Practitioner can help you to arrive at. Naturally, it’s best that you only commit to what is realistically affordable for the IVA to be effective in helping your financial situation. It may be the case that some of your debt is ‘written off’ although stories of this are often thought to be exaggerated.
In order to use an IVA, your Insolvency Practitioner will present your proposal to the creditors through the court system. As an IVA is normally used when you have multiple creditors to whom you owe debt, they will usually then meet and have a vote to decide whether or not to accept the agreement.
One of the main advantages to having an IVA, is that providing the creditors agree to it, and you keep to the terms of the agreement, they cannot pursue you legally for the debt as they may do otherwise. Another advantage is that the debts that you owe are ‘frozen’ in the sense that they will not generally accumulate additional interest during the time outlined in the agreement. This means that the debt immediately becomes significantly more manageable to you, and stops growing in the way that it more than likely has been up until this point.
An Individual Voluntary Arrangement could be the answer to your debt problems. Contact IVA.net to find out if you can apply for an IVA and write off some of your debts.
