Individual Voluntary Arrangements (IVA’s) are a form of debt management which are becoming more and more popular. They act as a solution for reorganizing bad debt before a bankruptcy becomes necessary.
Any individual, sole trader or partnership can apply for an IVA should their levels of debt be overwhelming and difficult to manage. Below we take a look at the main advantages of applying for an IVA to help you decide whether it is the right solution for you.
– A sole trader or partnership is able to continue trading after entering an IVA. This is done so that repayments are more likely to be met and the terms of the IVA fulfilled;
– Repayments to creditors will be in the form of one affordable monthly payment which has been pre-agreed by them through a vote. This amount is reviewed by a finance professional and adjusted accordingly to suit the debtor. After a period of five years, the debt is written off whether or no the full repayment of the debt has been made;
– There are no restrictions from an IVA as there are associated with bankruptcy;
– An IVA is not made public like bankruptcy charges are. Therefore your financial position can remain anonymous should you desire;
– With an IVA the debtors assets can be maintained such as the mortgage on a property enabling a more normal way of living through debt management;
– Creditors are usually happy to meet an IVA agreement rather than bankruptcy as the costs related to an IVA are lower and they can claim VAT and tax relief from it.
There are many solutions if you are facing financial difficulties and an IVA could be one option that is suitable for you. The best advice is to first talk to a financial expert about your particular circumstances as every case is different. There could be other alternative and more relevant solutions available.