IVA Debt Problem Explained

Posted by Sony Dewan | 7:32 AM | | 0 comments »

An IVA is a popular debt solution within the UK. The IVA can often be described as being "Government backed", "Government debt solution", "Endorsed by the UK Government", which suggests this is a safe route to resolve your debt problems.
An IVA can be the right solution for people who are technically insolvent, however too often it's 'sold' as a cure for all debts by "writing them off".

What is the IVA?
An IVA is an agreement made with your creditors whereby you make an affordable monthly payment towards your debt. The IVA is a legally binding agreement which requires you to co-operate with your Trustee. If you meet all of your Trustee's requests you will be debt free after your discharged and have repaid a percentage of the debt you owed (minimum 25%).
To enter the IVA you must owe at least £12,500 in unsecured debt, be able to repay at least £200 a month towards your debt and repay a minimum of 25% of the unsecured debt over the 5 year period.

Alternatives to an IVA?

There are a number of different debt solutions available to people suffering with debt. In some instances, people can repay their debt without an IVA, for example with a debt management plan. The debt management plan would enable people in debt to enter an informal arrangement to repay all of the money owed. In some circumstances the interest and charges can be frozen. For most people entering an IVA the Debt Management Plan would not be suitable because the solution would last too long.
Bankruptcy is another option for people with severe debt problems.

What are the negatives of the IVA?
The IVA is a popular debt solution with over 40,000 people using this solution to resolve financial troubles. - Whilst your IVA lasts for 5 years typically, your default on your credit rating will last for 6 years. This equity would need to be released, which may mean selling your car or house.
- If you fail your IVA your Trustee will usually proceed with Bankruptcy. Interest and charges which would have been frozen during your IVA will be added onto your total debt for the period you were in the IVA.

Choosing the right debt solution
Different companies will advise on debt solutions differently. An IVA has become a popular debt solution for people in debt. Money problems can be made better or worse by speaking to the right organisation. A charity will ensure the advice, support and solution is tailored to your exact requirements. There are a number of ways you can get help from an advice charity, including face to face, internet or telephone. A debt advice charity can ensure the IVA is the right debt solution for you.
Debt Support Trust is a registered charity providing advice on general money advice, debt management, IVA, Trust Deed or Bankruptcy. The Debt Support Trust team can provide qualified, independent debt advice and support free of charge.
Read More...

Levels of homelessness are on the rise, as are requests and applications for IVA (Individual Voluntary Arrangement) help. More and more people are turning to IVA help as a way to deal with their financial problems and those that can't get IVA help risk winding up on the streets. Both the increase in applications for IVA help and this year's 8% rise in homelessness are symptoms of the country-wide economic downturn.
Other than the increase in applications, the biggest change when it comes to IVA help is the people who are applying for it. IVA help was once the fall-back option for low-income families who had fallen on tough times, now increasing numbers of lower-middle and middle class earners are finding themselves with insurmountable debts and looking into getting IVA help.

Crisis, a UK charity who help the homeless, has reported an increase in once middle class people sleeping rough after falling on hard times and finding themselves let down by the welfare system and unable to get secure IVA help or housing.
Middle class homelessness is still very rare but Crisis are arguing that the current financial downturn, combined with government cuts to the welfare system, could result in a serious and exponentially worsening amount of homelessness, across society.
With so many people needing IVA help and nasty reductions when it comes to housing benefits and provisions for families and individuals in crisis, homelessness is demonstrably becoming more common.
There has been an increase in desperately poor families living in poverty in the UK, families which are too destitute to be eligible for IVA help, and there just isn't the right sort of provision being made for them by the government.
There is too little housing, too little support and too little in the way of welfare for the desperately poor. A working or middle class family who are experiencing financial difficulties could fairly simply apply for IVA help, make some savings by living more frugally and emerge on the other side. But for the desperately poor who aren't eligible for IVA help or other debt management assistance the safety net that is supposed to catch them before they wind up homeless seems to be getting progressively smaller.
Read More...

Solutions For Personal Insolvency

Posted by Sony Dewan | 7:52 AM | | 0 comments »

As the economy is in a period of recession, insolvency has become more common. In reality, over 1 million Americans nationality holder filed insolvency in 2007. It is a financial state that often precedes bankruptcy.
Bankruptcy is a lawfully declared situation in which a person or business becomes insolvent; it means that they are not in a position to pay their creditors. Debt is a part of life these days, but excess of debt can make life complicated to enjoy. There are two potential solutions to get independence from this trouble and get rid of your financial worries. It includes submitting file for insolvency and negotiating with Debt Settlement Company. Before you choose any option, it is important to know the pros and cons of using a debt settlement company versus filing for insolvency to alleviate your financial misery.

Negotiation with Debt Settlement Company is the first solution after personal insolvency, and there are some factors that will examine whether negotiation with debt settlement companies is right or wrong. You need to see your monthly income; if it is more than your essential living expenditures, debt settlement may help you to resolve your financial crisis. You must ask each debt settlement company about their unsecured debt balance necessities to decide which debt arrangement company is right for your circumstances.
Look for honest debt settlement companies because you cannot bear any more shocks at this stage. You have to find a company who has a strong record of efficiently negotiating with the creditors. You have to make your mind and get yourself ready to accept the disadvantages of debt settlement programs such as the increased creditor calls, lawsuit initiated by creditors, tax troubles etc.
You may discuss your financial problems with a legal representative who have specialized in bankruptcies. A legal representative can prove to be a strong hand, in order to get independence from your all financial worries.
An IVA (Individual Voluntary Arrangement) is a kind of debt management plan set up to deal with personal debt and with the issue of personal insolvency. The needs of one individual may be vastly different from the needs of another. Any IVA help given must take into account the vast nature of the situation, in which people find them.
You can determine whether filing for bankruptcy is a better solution as compared to other solutions. When other kinds of debt settlement plans fail, one is left with bankruptcy filing as the only option. It is a legal process that gives you the option of declaring your current financial position through a court case. In filing the petition, there are a number of chapters under which you can file your case, depending on your ability to repay the debts.
Private debt management companies are the areas of economy that are doing well even in the recession. Debt solutions, such as personal bankruptcy, Individual Voluntary Arrangements and debt management plans are proving to be extremely acceptable by the debtors. Debt solutions help people to either manage or write-off debt, as well as help to prevent creditor harassment.
Read More...

IVA Law

Posted by Sony Dewan | 7:51 AM | | 0 comments »

The law on Individual Voluntary Arrangements (IVA) is now firmly part of the range of remedies available to someone with significant debt problems. An individual consumer, or self employed person, with unsecured debts - usually greater than at least £12000 - has the right to apply for an IVA.
An IVA is basically a new contract between the debtor and creditors, organised by an Insolvency Practitioner which can be quite flexible to meet the individual circumstances of each case. The concept of an IVA was introduced under the Insolvency Act 1986 originally to help trades people resolve debt problems. Approaching 50,000 consumers and self employed people took advantage of an IVA last year.

The main characteristics of an IVA are fairly straightforward. An IVA is a private arrangement between the debtor and creditors. No attendance at Court is required - unlike with bankruptcy. All unsecured debts, including tax and VAT can be included and are effectively consolidated into a single lump under the IVA. The law allows the Insolvency Practitioner a degree of latitude into how the IVA agreement is actually put together. The agreements are formal and legally binding and usually last for a fixed period of 60 months with a fixed monthly payment; however others have variable monthly payments or provide for a single lump sum only.
The Insolvency Practitioner must put together a detailed proposal to present to creditors to obtain approval for the IVA to go ahead. Under the IVA law and associated procedures once approved the debtor becomes legally protected from further creditor action - as long as the terms of the IVA are kept. The Insolvency Practitioner - acting as Supervisor of the arrangement - is legally responsible for ensuring that the debtor keeps to the arrangement; collecting and distributing the payments to creditors; making the creditors aware of any changes or breaches as well as conducting annual reviews of the case to ensure compliance.
Once the IVA is satisfactorily completed the debtor is then formally released by the Insolvency Practitioner from any further obligation and any outstanding debt liabilities are immediately written off. Obviously by entering into an IVA the debtor's credit rating will be affected - usually for a period of 6 years from the date of entering into the IVA - however the benefit of having a single affordable monthly payment and removing the debt stress can more than outweigh the possible restriction of credit availability.
Under the IVA laws only a suitably qualified Insolvency Practitioner is able to put together and supervise an IVA. There are only a limited number of such individuals in the UK and they are all very heavily regulated by government and legislation.
Read More...

Making Debt Life Simpler For You

Posted by Sony Dewan | 7:50 AM | | 0 comments »

There are people who live on loans unlike others who take loans but by thinking wisely. Both these types of people can suffer if they cannot repay these loans. IVA debt program has been designed to help these people. This is a legalized contract which is signed by the debtor and the creditors. Once this contract is signed, all the responsibility of clearing the debts becomes the duty of the insolvency professionals or the insolvency practitioners.

There are many programs under this IVA debt help. The program which will be suitable for a particular borrower is decided by the insolvency practitioners or the professionals. It also depends on the kind and amount of the total debt. The borrower's paying ability also matters.
This is a legal contract and once it is signed the lenders cannot contact or threat the borrowers in any way. This contract works only when the lenders and the borrower agree to the contract. Once the contract is signed, the responsibility of the borrower's debt is transferred to the practitioner or the professional. The monthly payments are decided according to the borrower's income. The terms and conditions of this program depend on particular programs like debt consolidation, IVA after bankruptcy, etc. Generally the borrowers have to fulfil some conditions which are must for any program. The borrower should have a monthly income. The number of minimum lenders should be 3 and minimum debt of the borrower should be £15000. IVA debt help is offered by the insolvency practitioners and professionals. They plan the borrower's payments according the income and conveniences of the borrower.
Read More...

IVA is a smart solution for people who are under debt or have debt related problems. It is the best alternative to bankruptcy. IVA stands for Individual Voluntary Agreement and it is an agreement between the creditors and the borrowers which is completely legal and binding. IVA's were introduced under the Insolvency Act of 1986. It is used to tackle the problem of bankruptcy and is of great help to debt-ridden people. Once the agreement between the debtor and the creditor takes place, an insolvency practitioner is assigned to the debtor and the payment plans are decided accordingly. In IVA the loan amount that the person has to pay over a period of time is reduced.

Features:
IVA is a contract that is signed between a debtor and the creditor. This contract says that after the signing of this contract it becomes the duty and obligation of the company to help out the borrower with the debt. Due to the close association between the company and the debtor, the person should choose carefully as to which company he should sign the contract with. After the agreement is signed then an insolvency practitioner is attached to the debtor to help him out. There are many different types of plans that the debtor can choose from according to his comfort. Normally up to about 75% of the total debt can be repaid. The amount can be reduced to such an extent that the person can pay off the rest of the debt comfortably.
Advantages:
The loan amount can be reduced accordingly to such an extent that the person can pay off the rest of the debt comfortably. The safety of the property and the job of the person are ensured.
Read More...

How IVA Debt Solutions Work

Posted by Sony Dewan | 7:48 AM | | 0 comments »

In these times when people rely on credit to get by, more and more people are finding themselves deep in debt. Sometimes so deep they cannot get out without radical help. For those people who happen to live in the UK, there is the option of an individual voluntary arrangement, which can be the perfect solution to some situations. It is usually a better alternative to bankruptcy and will work when your situation is too serious for debt management.

What is An Individual Voluntary Arrangement?

An individual voluntary arrangement is a formal agreement, only available in the UK, that is made between your creditors and yourself in which you agree to pay back a percentage of the money you owe to them. This is done over a five year period and is a binding legal agreement as long as you keep up the repayments. These legally binding agreements are commonly referred to as IVAs and are not available in countries outside the UK. It is a way of writing off a large part of your debts that you cannot afford to repay.
How Does It Work?
You can apply to any good debt company that provides this solution to get a free review. They will go through your finances in detail before getting back to you with a proposal if that is a suitable option. Proposals will be drawn up for an individual voluntary arrangement using questions that you answer about your financial situation. You need to check the proposals over and sign them before returning them to your insolvency practitioner (IP).
An Interim Order is then applied for through the courts. Creditors can no longer take legal action against you after an Interim Order is in place. For an Individual Voluntary Arrangement to be approved, creditors representing 75% of the monetary value of the debts must approve of the plan. If one creditor represents more than 25% of the monetary value and he refuses, your IVA will fail. If certain creditors do not vote it is assumed they are voting for the arrangement. These are in marked contrast to a debt management plan, which is an informal solution with no way to compel creditors to join the plan.
IVAs are legally binding, which has advantages in your favour, but it also means that you cannot just change your mind about it if your circumstances change. The creditors cannot change their minds either once they have voted. If you fail to keep up your repayments then the creditors can come after you again and you could even be made bankrupt. People likely to be approved for an IVA are likely to have debts of at least £15,000 and be struggling to keep up with repayments. For an arrangement to work and be approved you will need to have a source of income, preferably from regular employment. Debts that can be included in the plan will be unsecured and they must be to a few different creditors.
Anyone in the UK who is in debt and considering bankruptcy should always approach a debt management company first, so see if there are any alternative solutions that may have less drastic and long lasting consequences.
Read More...

Tips for Avoiding Bankruptcy

Posted by Sony Dewan | 7:48 AM | | 0 comments »

Although bankruptcy might seem like an easy answer to your financial problems, it is best avoided if at all possible. After all there are so many disadvantages associated with bankruptcy that it really should be a last resort.
If you file for bankruptcy it will stay on your credit record for a number of years. This will make it practically impossible for you to obtain a credit card or loan. If you do manage to get one you are likely to be subject to hefty interest charges and fees.
Furthermore, although it does not always happen if you go bankrupt you may lose your home. Bankruptcy can also affect your long term career options. If you own a company you will be forced to close it and your employees will be dismissed. Whilst looking ahead, you will not be able to form a new company in the future without the court's permission. You can also lose your professional status and are not allowed to hold public office.
Given all the negative effects of bankruptcy it is worth considering the alternatives to it. The Insolvency Act of 1986 introduced the IVA as a legitimate alternative to bankruptcy.
An IVA does not have any of the disadvantages attached to bankruptcy. For instance there is no social stigma with an IVA as it is entirely private between you and your creditors.
An IVA is a formal arrangement between you and you creditors. If your creditors agree to this they will write of a certain amount of your debt completely. In addition they will freeze interest on your debt and agree not to contact you whilst the IVA is in place.
An IVA allows you to repay your debt over five years. After this time, if you have abided by its terms, you will be declared free of debt.
An IVA enables you to avoid bankruptcy and clear your debts. They can be excellent alternative to bankruptcy for people with debts over £15,000, multiple creditors and who can afford to re-pay at least £200 a month.
Read More...