IVA stands for Individual Voluntary Agreement, which is a kind of agreement between you and the person you owe money. With this agreement, your creditors may agree to reduce interest on the debt, reduce the amount you pay and freeze interest on debts. But, you need to make payment of the set amount which is agreed. The set period is usually five years time. After the end of this tenure, your debt will be set. IVA can help to freeze interest altogether, you have to pay on the debt. This is the government recognized, and the government approved the scheme, which is suitable for those in massive debts.
The option is a fabulous substitute to bankruptcy. If you can't make the entire payment of the debt but can pay only a part of it, IVA is suitable for you. This agreement is voluntary binding between the debtor and the creditor. The moment you sign the deal and your lender agrees to it, and he can't add to the debts or interest on the charges included in the form. He has to proceed by the form.
What Happens When You Owe Money To Several Creditors?
There may be 2-3 lenders whom you owe money. Two lenders may agree to the agreement, and the one does not. The proposed amount you can pay to the lenders is put in front. If the agreeing lenders cover 75% of the total payment you are supposed to make, the agreement will go ahead. Since the contract is legal, your creditors in no way can back out. The rest of the lenders have to agree.
Ways In Which IVA Can Help
There will be an insolvency practitioner who will put forward the payment in front of the lenders. After the lenders or creditors agree to the form, they have no right to add more interest or impose additional charges to the debt. After the completion of IVA term, the remaining debt will be written off. Nearly 70-80% of the debt can be written off after the expiry of the term agreed. It is the best option for a homeowner who does not want to part with the home. There is no need to declare bankruptcy or insolvency.
When nearly 70% of debt is written off, you may make remaining payment on a monthly basis. There is no chance of legal action to be taken against you. Rather than declaring as insolvent or bankrupt, freeze interest with an IVA. Indeed, there will be enough money for you to live life. IVA agreement process is easy and convenient. You also have the option to review the payment to find whether it is affordable or not.
If you want help with IVA, you may browse through the official link of different companies that caters to this kind of service. It gives a lot of perks to the company owner who is heading towards bankruptcy. He need not resign as director.