How To Apply For Individual Voluntary Arrangement?
by Bill Shawn
The Individual Voluntary Arrangement (IVA) is considered as an alternative to bankruptcy, where the debtor as well as the creditor will be benefited. An Individual Voluntary Arrangement helps people in their debts with a formal agreement from their creditors, rather than facing bankruptcy. The Individual Voluntary Arrangement is the best choice for those who are in debts; it avoids bankruptcy and makes an individual to start a fresh lease of life.
The Individual Voluntary Arrangement was started in the year 1986 as an alternative to bankruptcy. Day by day it gained popularity and many of them had chosen IVA for clearing their debts. The success rate of the IVA has been increased where 50,000 IVAs have been completed as of 2006.
IVAs have become a huge success as a part of its benefits. Compared to Bankruptcy Individual Voluntary Arrangement is a private agreement in between creditor and debtor. Also there is no need of saying to anyone that you been paying IVA; this is because no one knows about your payments as it is a private agreement, whereas in bankruptcy your details will be made in public.
Setting up Individual Voluntary Arrangement involves the help of insolvency practitioner, where you must outline your debt payment proposal describing how it benefits the creditors and also the funds available to them. Later on, you can apply to the court for provisional order.
If the court grants permission then the creditor has no right in filing for bankruptcy. This period is known as “Pre-Bankruptcy period” and during this period one can make use of the insolvency practitioner to arrange a meeting with the creditors. If 75% of the creditors agree then this agreement becomes active.
Once the agreement is approved then you are able to enjoy these benefits. Your case will not be made into public notice compared to bankruptcy, as it is a private agreement in between you and your creditor. The time involved in Individual Voluntary Arrangement is about five years and after that you will be free from your debts even though you haven’t paid the entire amount. Also once you are in this agreement, you will be free from your creditors’ letters, phone calls and emails etc.
Also when you are in the Individual Voluntary Arrangement, you may avail fresh credit. Compared to bankruptcy IVA helps to improve the credit score. When you are in this agreement, your lenders cannot access your secured assets such as house etc. compared to bankruptcy Individual Voluntary Agreement is less expensive.
Make sure of the terms once you are in an agreement. Stick to the rules of the Individual Voluntary Arrangement or else the insolvency practitioner can make bankrupt on behalf of your creditors. Also if you are not able to meet the payments, your IVA ends if the insolvency practitioner fails to convince your creditors in accepting a new agreement.
Please check Individual Voluntary Arrangement and bankruptcy for more information.