Financial processes can be such a hassle for a lot of us, but things like an IVA can facilitate the procedures for people, especially those who are having issues in paying off their debt. It started back in 1986 and was originally aimed for small startups or businesses as an alternative to shutting down or filing for bankruptcy. But because financial problems are more common than you think, people started thinking about IVA personally.
What Does IVA Mean?
An IVA, standing for Individual Voluntary Arrangement, is a legal document between you and your unsecured creditors that protects you from any actions taken against you. If you find yourself in a position where you are unable to repay what you owe, no one will hire a debt collection agency to handle your case. Also, you won’t need to worry about having more installments to pay; all of it will be frozen, and your debt won’t get any additional interest added to it.
The IVA is an agreement with your unsecured creditor stating the fact that repayments are based on your income and financial situation; if there comes a period where you can’t pay anymore, it will be written off. So here are some reasons why you should get an IVA.
It Helps Protect Your Future
When you set this up with your creditors, you would all agree that it’s for a fixed period. Hence, you will not be staying in debt for the rest of your life. In most cases, this can last around 5 years, give or take, and this arrangement is a legal obligation that binds both parties to it. So, you won’t have to worry about any creditor changing their mind later; there is no going back or asking for additional installments once they sign it.
It Works For Freelancers
The great thing about this arrangement is that you are legally permitted to have it even if you’re self-employed. It’s also okay to start your own business if you already have this agreement already in place. It wouldn’t hurt to read more about the facts and particulars of having it as a contractor or sole trader. You just need to be smart and find a way to convince your creditor to sign it with you. Just remember to keep your bases covered and think about it thoroughly.
No Legal Actions Against You
Most lenders tend to start different legal processes against people in debt when they aren’t paying anymore. However, that will never happen to you after an IVA is signed. You are legally protected and exempted from any action against you when you can’t pay anymore. Once they sign an IVA, your creditors give up their rights to take legal action against you, and so you will be off the hook.
Your Assets Will Be Safe
This agreement protects everything you own as well; you won’t need to consider the idea of liquidating your assets to get the funds to pay off debts. Also, no one would ever threaten or force you to give up these assets to repay your debt. You will be completely safe and have the rest of your debt written off; your home equity, belongings, and other properties will not be taken away.
Allowances Are Part Of The Deal
Your insolvency practitioner or advisor would understand that you’re not alone in this situation; you have a home and a family with their own expenses to take care of. So, they would come up with a financial plan that takes into consideration that you will need to keep paying for household costs, schools, food, clothing, childcare, and other essential payments.
Your Reputation Will Be intact
Difficult financial circumstances are best kept between you and your family. That is why filing for bankruptcy was always a terrible thing because it gets published and becomes public knowledge. With this arrangement, no one will find out about your financial situation keeping your reputation untarnished.
Also, your employer won’t find out either because your PAYE tax code will remain as it is. You won’t need to worry about any stigma or bad outcomes with an IVA.
In cases of insolvency, you need to get in contact with the professionals to handle it for you because you can’t set up this arrangement on your own. The best person that can help you is an insolvency practitioner; they are trained and knowledgeable enough to give you all the advice you need to help you in your tight financial situation. This arrangement has so many positive aspects, which is why you need to consider getting it to help you get out of debt.
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