IVA- Relief For A Debtor
A new type of debt solution for the convenience of debtor, and creditor was introduced in 1986, and was named as Individual Voluntary Arrangement, or IVA. According to this arrangement, the debtor is legally obligated to make fixed debt payments for five years. It is similar as individual or personal bankruptcy, but is not as damaging as bankruptcy.
IVAs are for unsecured debts of an individual like personal loans, bank overdrafts, credit cards, and store cards. Secured loans such as hire purchase agreements and mortgages are not included in an IVA. It is, no doubt, a better option than personal bankruptcy, as it does not dissolve partnership, and allows an individual to act as the director of a company. Unlike bankruptcy, a self-employed trader will not have to disclose his financial situation in case of Individual Voluntary Arrangement.
Personal credit rating is affected by the bankruptcy, consequently making one to lose the job. However, IVA does not affect the personal rating during its life, and does not affect the job, as it is a private agreement between the creditor, and the debtor. IVA also does not bound a person to a single job, one can hop job as frequently as one wants. The only consideration that must be kept in mind for it is that the remuneration package affects the monthly instalments.
Bankruptcy causes many people to lose their jobs as most organisations, and institutes fire employees having bad credit rating, as it may ruin their reputation by having a bankrupted employee or an associate. IVA is far more respectful than the bankruptcy, but they may come under some temporary restrictions, which is better than being fired.
Only the authorised Insolvency Practitioners can arrange IVAs. If a change is needed in the IVA, one must stay in touch with the creditors, but the creditors wish that the debtors should pay as much as possible every month to reduce the payback period.
IVAs restrict the spending of an individual, i.e. one must not spend more than a limit set by the creditor in a single month, and the creditors might limit the spending on items regarded as luxury items. The credit ratings of an individual will be affected by the IVAs after the payment in five years, which would make it difficult for the individual to get a loan or mortgage because unhealthy credit ratings.
The major reason why people choose Individual Voluntary Arrangement is to keep control of their homes, unlike bankruptcy. In addition, a major reason for people choosing IVA over bankruptcy is the fear of losing their jobs.
Individual Voluntary Arrangement or IVA is a good solution for getting rid of debt, as it is a private agreement that does not affect the reputation. People, who are into IVA, do not lose their job, or partnerships; they merely have to make an adjustment with their lifestyle. Although it affects the credit of the person after the duration of the IVA has been completed, it does not result in the loss of job. - 23211
IVAs are for unsecured debts of an individual like personal loans, bank overdrafts, credit cards, and store cards. Secured loans such as hire purchase agreements and mortgages are not included in an IVA. It is, no doubt, a better option than personal bankruptcy, as it does not dissolve partnership, and allows an individual to act as the director of a company. Unlike bankruptcy, a self-employed trader will not have to disclose his financial situation in case of Individual Voluntary Arrangement.
Personal credit rating is affected by the bankruptcy, consequently making one to lose the job. However, IVA does not affect the personal rating during its life, and does not affect the job, as it is a private agreement between the creditor, and the debtor. IVA also does not bound a person to a single job, one can hop job as frequently as one wants. The only consideration that must be kept in mind for it is that the remuneration package affects the monthly instalments.
Bankruptcy causes many people to lose their jobs as most organisations, and institutes fire employees having bad credit rating, as it may ruin their reputation by having a bankrupted employee or an associate. IVA is far more respectful than the bankruptcy, but they may come under some temporary restrictions, which is better than being fired.
Only the authorised Insolvency Practitioners can arrange IVAs. If a change is needed in the IVA, one must stay in touch with the creditors, but the creditors wish that the debtors should pay as much as possible every month to reduce the payback period.
IVAs restrict the spending of an individual, i.e. one must not spend more than a limit set by the creditor in a single month, and the creditors might limit the spending on items regarded as luxury items. The credit ratings of an individual will be affected by the IVAs after the payment in five years, which would make it difficult for the individual to get a loan or mortgage because unhealthy credit ratings.
The major reason why people choose Individual Voluntary Arrangement is to keep control of their homes, unlike bankruptcy. In addition, a major reason for people choosing IVA over bankruptcy is the fear of losing their jobs.
Individual Voluntary Arrangement or IVA is a good solution for getting rid of debt, as it is a private agreement that does not affect the reputation. People, who are into IVA, do not lose their job, or partnerships; they merely have to make an adjustment with their lifestyle. Although it affects the credit of the person after the duration of the IVA has been completed, it does not result in the loss of job. - 23211
About the Author:
Edward Woodwards is a financial consultant. You can take individual voluntary arrangement and solutions to your debt problems. Find out more information at his recommended site http://www.iva.org.uk.
posted by X - Men @ 5:02 AM
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