Individual Voluntary Agreement
An individual voluntary agreement, as provided for under the Insolvency Act, is only used by people who are barely solvent. It allows people to cut down what they owe, reduce their monthly payments, put the interest they owe on hold and it is achieved by applying through the courts.
The purpose of the individual voluntary agreement is to avoid bankruptcy, and it enables the petitioner for an IVA to carry on practising his trade, maintain directorship and so on.
If your debt is under £20,000 then an individual voluntary agreement is not the right solution, but if it is over that amount then a qualified practitioner will lobby on your behalf in the courts for the IVA and, if successful he will put a solution to your creditors, three-quarters of whom must agree, and if they agree he will then consolidate your debts into one affordable monthly repayment. Your creditors will then be no longer able to contact you, and must deal with your practitioner. In addition, if you maintain the repayments for five years, all the remaining debt will be wiped clear leaving you completely debt free.
Clearly an individual voluntary agreement can turn a potential bankruptcy into a much more favourable situation, but other provisos are that you must have four or more creditors and declare all your debts. For more details it would be best to contact an IVA specialist.
|