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Posts Tagged ‘IVA’

IVA is the shortened form of “Individual Voluntary Arrangement”. It is in fact is a modern alternative to the bankruptcy. In stead of the fact that, IVA’s was first available in the year 1986 through the Insolvency Act, even then they have only achieved notoriety among the public domain only in the recent years. An IVA is nothing but a legally binding contract in between a debtor and the creditors. An IVA ideally lasts for as long as 5 years, and at the end of the term the debtor is regarded to be free of debt. During this period of time the fixed monthly repayments which reflect the debtor’s present disposable income are made. An IVA is specifically suited to the debtors who are having financial supports from their relatives and/or having a dependable and regular source of income. An IVA gets supervised by the debt management company.

The Advantages of an IVA

Until the inception of IVA’s, bankruptcy was in fact the harsh reality for the consumers who lost total control of their debts. But, the problem is that bankruptcy is a costly and at the same times a public affair. Thence, a debtor will totally loose all the control over their property and their credit ratings will eventually suffer severe damage. On the contrary, as a solution to the issue of debt, an IVA disburses a lot of benefits:

• The costs are a lot less.
• When the repayments are set the debtor’s disposable income is taken into consideration.
• Right from the date of the arrangement all the interest and the charges on the debt are made frozen.
• Only a handful of restrictions are applied if you compare it with the bankruptcy.

These are the major benefits that you can derive out of the IVA.