Reasons for Choosing an IVA
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Independent Voluntary Arrangements are an alternative to bankruptcy. To be eligible for an IVA there are some key criteria you have to meet. You need to be in debt to three or more creditors, and you need to be over 15,000 in debt. But if you are in this situation then they're a good option in some key way. To understand why, it helps to know the difference between them and bankruptcy.
If you're bankrupt your assets and bank account go into the hands of a trustee. They are then used or sold in order to pay back creditors and see to it that within a year you are clear to start again. With an IVA, you don't lose control in this way. Assets are under supervision, but you can designate key things, such as you prized car or family home, which are off-limits to bailiffs. In return you agree to pay back debts with a small monthly payment over five years.
The structured nature of IVAs means that you make regular, small payments on a monthly basis to pay of debts. This takes a while to do - usually around five years - but it should be much less stressful than the short and chaotic process of bankruptcy. Also, because you're paying a regular bill, you're able to improve you credit rating whilst still paying off debts. So all round it means you're in a more stable process.
It is good to bear in mind that for all this to be possible, you need to have money coming in for your payments. That means a regular job is essential. Monthly payments might be as little as 200 pounds, but failure to pay them means you might lose your rights in the agreements, and bankruptcy will be the only option again.
It's clear to see that an IVA is a viable option if you don't want to go through the short, stressful process of bankruptcy, and the loss of assets that that entails. So look into this alternative if you're faced with large debts.
Article Source: Articlelogy.com
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