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Credit Repair Services and Information |
Credit Repair Services and Information Applying for an IVA If you're struggling to repay your unsecured debts and can't see yourself being able to repay what you owe in full within a reasonable period, you may be able to find a debt solution that can help you make your monthly payments and write off the debt you can't actually afford to repay. One such debt solution is an IVA (Individual Voluntary Arrangement). The idea of an IVA is that you will repay a reasonable proportion of your unsecured debts over time, before the rest is written off on successful completion of the agreement. You can find more information on an IVA at iva-forum.com How do I apply for an IVA? To apply for an IVA, you'll need to go to a licensed Insolvency Practitioner (IP), or a debt adviser/debt management company who can put you in touch with one. Your IP is responsible for the legal side of your IVA, and before your IVA can start they will work with you to draw up your IVA proposal - if they believe an IVA is the right way for you to address your debt problems. The IVA proposal contains details of your finances, as well as the proposed terms of your IVA. This will then be sent on to your lenders, who will be invited to 'vote' for or against the IVA going ahead. Of those who choose to vote, 75% (by debt value) must approve the terms for your IVA to begin. Those who don't vote (or who vote against the IVA) will still be bound by the terms if you receive this approval. Once your IVA starts A typical IVA involves making regular monthly payments for 60 months (five years). This should be continuous, but if for any reason you have to take a break, you'll still have to make 60 payments in total - if your lenders agreed to let you miss a couple of payments, you'd make a couple of payments after the 60 months are over to make up for this. Your monthly payments will be based on what you can afford once your other essential costs have been accounted for. You'll receive regular reviews of your circumstances to assess whether your IVA is still appropriate, and whether you can afford to pay more (or less) towards your debts. On successful completion of the IVA, the unsecured debt you haven't yet repaid will be written off. Things to remember An IVA is a form of insolvency, and as such it will have a negative impact on your credit rating (for six years after it starts). Although it won't lead to repossession for homeowners (like bankruptcy can), it may require you to release equity from your home in the final year if you are a homeowner. |
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