If you are in the midst of a personal financial crisis, there are several tools that can come to your rescue. Having debts and financial issues can be extremely taxing and confidence-sapping, especially for those who aren't well-informed about their options. With Individual Voluntary Arrangement, you are presented with an easy way to manage and clear your debts to every creditor evenly. IVA is a legal arrangement that eases the procedure by putting together feasible repayments over a time period, and differing from a variety of other available methods.
What is IVA?
Individual voluntary arrangements are legally binding contracts between the debtor and creditor(s). The time period for the financial understanding is generally five years, during which the debtor will be expected to make manageable payments on a regular basis. Only an insolvency practitioner is legally allowed to set up the arrangement; he will expect the debtor to declare every unsecured debt into the arrangement.
IVA serves as a formal set-up for people who've been finding their financial dues difficult to clear. All charges and interest amounts will be set to zero and the creditor disallowed from demanding extra payments. As far as the monthly payment calculations go, they are calculated on the basis of what you (the debtor) can realistically manage. These scheduled payments over a 5-year period are generally fixed in nature; however, there are chances of instalments getting increased if the borrower witnesses a positive change in his income and financial status during the period.
Important Individual Voluntary Arrangement Facts
IVAs can get a bit complex, at times. Therefore, knowing the most pertinent facts help demystify the financial code, a great deal.
If your lenders don't object to lowered payments, IVAs can help with the repayment of unsecured loans - store cards, credit cards, overdrafts, unsecured loans, etc. With an IVA in place, creditors cannot legally seek further payment. The costs associated with the monthly arrangement will be less and be affordable since they are based on your current financial standing.
Post successful IVA completion, your unsecured outstanding debts would be cleared off. You are expected to pay as much as possible during those five years. Once done with, you'll be freed from your unsecured debts. IVAS don't appear in papers and you also won't lose your home via IVA.
Choosing the Right Insolvency Practitioners Association- A Few Tips
People looking for insolvency service are often found stuck when trying to hire the right practitioner. If you've experienced this issue as well, ensure the person you associate with is worth trusting. The practitioner shouldn't just talk you into the deal; he must also have valid credentials (license) backing his speech. There are quite a few financial advisors who are constantly on the lookout for desperate individuals so that they could be matched with a particular firm for a hefty commission. So being extremely agile and alert is critical to your chances of not falling prey.
The debt advisor must be experienced enough to tackle a variety of situations and should be all ears when it comes to listening to your grievances. Moreover, his responses should be in an easily comprehensible language so that you don't suspect anything fishy.
Accessibility is another important trait of a reliable and trustworthy practitioner. If the advisor isn't responding to your emergency calls or doesn't show up when you want him to, then he's probably not the ideal person to work with.
The financial advisor shouldn't have fees on top of his mind always. He must charge as per industry standards and must be willing to present a fee breakdown. Initial consultations are generally free. Genuine advisors don't charge their clients for an initial verbal encounter. Also make use of the opportunity (first meeting) to clarify every doubt you may possibly have. If the advisor is unable to clarify your doubts or is not very forthcoming with his responses, you can very well envision the experience you'll put yourself into if you go ahead with his association.
Tackling financial problems in this day and age can be a daunting task. You need to be well aware and have access to the right sources to stay afloat. Fortunately, IVA is a huge life-saver. However, how nicely an IVA works for you hinges a lot on the expert help you resort to. So, tread with caution and be extremely wary when half-buried in a financial mess.