Individual voluntary arrangements

Individual voluntary arrangements (IVAs) could be an option when seeking resolution for your debt problems. Consumers that obtain IVAs find them to be quite flexible and less restricting than some other extreme options of getting debt help, such as bankruptcy. It is quite simple to begin the IVA process.

Prior to seeking an IVA, time should be spent organizing and obtaining your financial documents. These could include taxes, bank statements, pay stubs and the like. You will need to submit these along with your application. Complete the application and turn it in along with the requested documentation. After the information is received, a consultant will contact the consumer who submitted the application. The consultant will then determine the eligibility of the consumer for the IVA. This information will be relayed to the consumer by the consultant. Once eligibility has been determined, the consumer must secure the services of an insolvency practitioner, who will guide you through the IVA process. Your creditors will be notified of this, typically by the insolvency practitioner. The purpose of this notification signals your creditors that any legal action on their part cannot be commenced.

A meeting between your creditors and your representative, the insolvency practitioner, is arranged. The purpose of this meeting is to officially present the IVA that was drawn up by the consumer. The IVA document is a proposed plan for dealing with the debt. All of your creditors will be invited to the meeting. Some creditors may choose to not attend, while other creditors will send a representative. A vote is taken following the presentation of the individual voluntary arrangement. In order for the IVA to be approved, a certain percentage of creditors must agree. Creditors that hold a total of 75% of your debt must agree. If the proposed IVA does not obtain this percentage of votes, then it is not accepted. However, if the votes obtained are adequate then the IVA is approved and becomes legally binding. No long can your creditor legally contact you regarding your debts. All you must do now, is make your monthly payment as outlined in the IVA.

Paul Robgher writes for debt-free.org.uk and takes great pride in helping people to be debt free