An Individual Voluntary Arrangement (IVA) allows people with unmanageable debts to negotiate and settle them in one go, taking control of their situation and becoming debt-free. But how do I set up an IVA? What can I expect from the application process, what follows it, and the role of the insolvency practitioner in setting up and managing IVA? This guide will take you through everything you need to know.
What is an IVA?
An IVA is a legal agreement between you and your creditors to pay off your debts. It's a form of insolvency, which means it's a way to write off debts if you can't afford to pay them back.
The application process is simple: you fill out a form and send it to your creditors. Once they approve the IVA, you make monthly payments to an insolvency practitioner, who then distributes the money to your creditors. The practitioner also manages the IVA and makes sure you're following the terms of the agreement.
What Does It Mean To Be Insolvent?
To be insolvent means that you are unable to pay your debts when they are due. This can happen for a variety of reasons, including job loss, medical bills, or divorce. If you find yourself in this situation, you may be able to set up an Individual Voluntary Agreement (IVA).
An IVA is legally binding and can help if you're struggling to make ends meet each month and want to avoid bankruptcy. The application process can be complicated, so it's important to work with an insolvency practitioner who can help guide you through it.
The Process - Setting Up An IVA
To set up an IVA, you must first contact an insolvency practitioner who will assess your financial situation and advise you on whether or not an IVA is the best option for you. If they believe it is, they will then help you draw up a proposal which will be sent to your creditors.
If your creditors agree to the terms of the IVA, it will be formalized and you will begin making repayments. The insolvency practitioner will also play a role in managing the IVA, making sure that both you and your creditors are adhering to the terms of the agreement.
The Process - Managing An IVA
Once the proposal is accepted by creditors, the IP will manage the IVA on your behalf. This includes ensuring that you make the required monthly payments and providing updates to creditors. If you are unable to make the required payments, the IP may negotiate with creditors to write off some of your debt.
The Insolvency Practitioner's Role In An IVA
An insolvency practitioner (IP) is a professional who helps people and businesses write off debts that they cannot afford to repay. The IP will work with you to create a plan that sets out how much you can afford to pay back each month.
The IP will also help you to negotiate with your creditors. This means that they will try to get them to agree to the IVA. If your creditors agree to the IVA, the IP will then manage it. This means making sure that you make the payments that you have agreed to and dealing with any problems that might come up.
You can learn more about how to apply for an IVA on Monemyst.
