An IVA refers to a formal agreement between a debtor and a creditor where the debtor decides the means by which he is going to pay off the creditor in a time span usually spread across 5 years.
Most of the companies will require one to fill up an application form to begin with.
An IVA can benefit those who know that their creditors will not agree to settle with an informal debt arrangement, who are already facing bankruptcy or are on the verge of it or those who have failed to succeed with an informal debt arrangement.
The UK insolvency helpline helps people get detailed information & guidance on IVA.
It even provides advice to other bureaus and centers.
For the public it provides free services.
At times an IVA agreement may even fall apart.
To successfully implement the agreement, one needs to get it approved by at least seventy five percent of one's creditors measured in terms of value.
The agreement will stand rejected if such an amount of creditors in value can not be persuaded to abide by such agreement.
An IVA is not a stringent method of debt management as it allows one to carry on with his lifestyle as before with minor changes where required.
Drastic change in one's way of living is not made.
This happens as creditors agree to a decent standard of living for you.
this however does not mean that you can spend lavishly on entertainment such as lottery, holidays, etc.
, because all this does not come under the essential living requirements.
In case the financial situation of the debtor changes over the period of the IVA, then requisite changes can be made in the agreement as well.
For instance if one happens to get a huge income from an unforeseen event during the IVA period, then he will have to use such amount towards the repayment of the debt & can not keep such amounts with himself.
This ensures that the creditor is paid back in full in case the circumstances of the debtor allow him to do so.