The term IVA refers to a type of debt solution that enables you to restructure unsecured debts into more affordable monthly payments. IVAs can cover any amount of debt, and they are usually suitable for people with more than three debts from more than two lenders. If you have additional debts, you need to make sure that you can repay them all before you file for an IVA.
There are several benefits to an IVA, but the first is that you won’t have to attend court. Another major advantage is that you can complete the IVA within four to six months. The procedure is quick and easy, and you won’t have to worry about paying court fees. Another great feature of an IVA is that it can help you pay off large amounts of debt, including credit card bills. It can also help you build your credit score again, as the IVA remains in your credit file for up to six years.
When you apply for an IVA, you’ll need to get free debt advice from a debt advisor. This advisor will be able to recommend the best debt solution for your situation. Once you’ve chosen a debt solution, you’ll need to work with an Insolvency Practitioner to put in place the IVA. The Insolvency Practitioner will go through your debt levels and income and expenditure to draft a payment plan based on your financial circumstances. You’ll also need to pay a fee to your Insolvency Practitioner, but this is usually covered by your monthly payments.
Once you’ve decided that IVA is the best solution for your debt situation, you’ll need to meet with your creditors and ask them to approve the plan. Once you’ve submitted your proposal, your IP will contact your creditors. Ensure that your proposal is clear and concise. Generally, you’ll need to have the IVA run for a certain amount of time to get your creditors’ approval.
To qualify for an IVA, you need to have equity in your home. If you have no equity in your home, you can consider obtaining a Trust Deed instead. In Scotland, this alternative option is equivalent to an IVA. It allows you to keep your home and retain the equity in it.
An IVA can help people with multiple types of debt and multiple creditors. It’s best for those who have debt that is too large to manage with an unsecured loan. The benefits of a secured loan include the ability to sell your home to cover your debt, which makes it much safer than an unsecured loan.
As with an IVA, the secured loan IVA is not suitable for all debt types. A secured loan IVA must be approved by all of your creditors. If your creditors reject your plan, they can take legal action against you. It is important to monitor your creditors’ actions closely.