For folks living in England and Wales, an individual voluntary arrangement — or IVA, for short — is a formal alternative for individuals who want to avoid bankruptcy. As such, having your IVA approved is a big achievement.
If you follow the terms and conditions of any IVA proposal, there’s a set time period for you to be debt-free. As soon as you pay during this time, the creditors will remove some of your financial troubles.
So, how does an IVA work? Well, an Individual Voluntary Agreement works by giving the chance to pay more to the creditors through the particular structure of the IVA before they make you bankrupt. As an IVA is usually a mutual agreement with your creditors, you keep more control over the financial matters than you’d experience in bankruptcy.
The IVA ensures that you get the opportunity to submit your proposals on how the collateral in your assets needs to be presented for the particular benefit of the creditors.
To make sure your IVA is carried out properly it’ll be administered or overseen by a Licensed Insolvency Practitioner — also known as an “IP.”
There are several critical tips that should be followed regarding how to deal once the IVA is approved. By following them, your IVA will certainly be a much smoother ride.
Read the budget and review letter carefully. The budget is usually created to help you keep the bills covered over the period of the IVA. You can use this to manage your hard-earned money between reviews.
Be careful with your financial position. When your IVA is approved, it is always recommended that you keep an eye on any changes in your expenses. Making your spending plan may give you a wise sense of control over your expenditure.
Tell the provider about your tax rebates. No doubt, honesty is the best policy when it comes to the Individual Voluntary Agreement and any unexpected money you get, such as a tax rebate. If you don’t tell this information to your provider, then it could cause a breach of the IVA, which is an official agreement.
Read all the paperwork. Manage your paperwork in a way that makes it easy to consult. It sounds obvious, but it is amazing too that how easy it is to lose track of all these things.
Inform your IVA provider about your extra income. This usually includes bonuses, overtime or any other extra money you get. The IVA provider reviews the situation and sees how much you will need to pay into your IVA.
Claim your payment protection insurance. If you have a legitimate Payment Protection Insurance claim, do not use fee-charging claims. You should make the Payment Protection Insurance claim yourself for free. Any income you earn must be paid into the IVA.
Avoid borrowing money during the IVA. You need to consult with your IVA provider before deciding to take a loan. In some cases, you will not be allowed to take out credit or loan while the IVA is active. This usually includes taking loans from friends and family.
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