A Short Guide To Individual Voluntary Arrangements Article
An Individual Voluntary Arrangement can enable you to reduce your debt burden and protect yourself from the threat of bankruptcy. It is an option that is well worth considering if your debts are spiralling out of control.
Individual Voluntary Arrangements, also known as IVAs, are a way of reducing the total amount that you owe your creditors. Monthly payments are reduced, and the interest on those debts is frozen to prevent them from growing.
IVAs can be obtained by applying to a debt management company. You will need to fill in a detailed questionnaire, and send in copies of your recent bank statements. Once you have done this, a representative of the company will give you a call to talk over your application.
In order to be accepted into the scheme, you will have to meet the criteria set down by the debt management company. Once you are accepted, you will be appointed a panel member to act on your behalf in a legal capacity. They will then contact your creditors to make them aware that they are representing you.
It is then up to the panel member to draught an Individual Voluntary Arrangement proposal based upon the information you have given previously, which they then have to submit to your creditors.
The next step is for an interim order to be issued, which gives you legal protection against any action that might be brought by your creditors for the period specified in the order.
A statement called a Nominees report will then be prepared by the panel member, which basically says that, in their professional opinion, you will be able to keep up your side of the bargain. A creditors meeting will then be held where they will vote to accept or reject the proposal.
If the proposed payment schedule is approved, you will not hear from your creditors again, and all payments will be made directly to the debt management firm. If, however, you fail to make repayments, you may be subject to bankruptcy style restrictions.
