Avoid bankruptcy with an IVA
If an individual’s debts have reached beyond a manageable state, their credit status will prevent them from gaining any further credit. In this case, Bankruptcy may not be an option to help you get out of debt. There are other options available to you. One of which is called an IVA. An IVA is a legally binding agreement between you and your creditors, which will get you one lower payment per month which you pay for a set period (usually 60 months), Then after this period is up any remaining debt is written off and you walk away debt free. By entering into this IVA, you will have more financing options open to you than if you chose the bankruptcy route. An IVA is a form of debt help that is both beneficial to you and the creditors as well, because the creditors will not lose all of their money as is what would happen with Bankruptcy.
When to use IVA
With the use of IVA, you may be able to avoid numerous financial restrictions that you get when you opt for bankruptcy.
- If you, as a borrower, have an existing business, you may continue with the trade.
- An IVA may also be beneficial to people who own certain properties but don’t wish to give up these properties.
- The agreement is easier to administer than Bankruptcy and the fees are relatively lower.
- You remain to be the director of your company.
- You may still submit other applications for credit, although with limitations.
The Process of an IVA
A series of processes will take place once you enter into IVA, such as:
- You must provide a nominee, a licensed insolvency practitioner, who will preside over to carry out an IVA. The UK Debt Advisor can help you with this.
- After the nominee has gathered all the financial information needed from you, the proposal is finalized to be submitted to the court and to the creditors.
- Once the proposal is acknowledged, the courts grant an interim order. The main objective of the order to stop your creditors to take any action against you.
- Meeting between you, the nominee, and the creditors is held so the creditors will decide on whether your proposal is acceptable and viable or not.
- The creditors will set a separate meeting for fourteen days with the following documents on hand: financial information, your proposal, a list of all your assets, form for a proxy voting.
- The creditors either reject or accept the IVA. In the case of accepting the agreement, they can normally expect a bigger return of money.
- Once the proposal is accepted, the nominee should ensure that you adhere to the provisions of the agreement and that creditors get paid.
Obtaining a Bad Credit Loan
Another option for you would be to seek debt help from a financial institution that can offer you Loans for Bad Credit. Give the UK Debt Advisor a call before entering into a Bad Credit Loan as you may have other options available to you. If it is too risky for you, try our Product Advisor to help you find the right solution for your circumstances.