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I V a Agreement

An IVA agreement is a formal agreement between an individual and their creditors, aimed at addressing debt problems. IVA stands for Individual Voluntary Arrangement, and it is a legally binding agreement that provides debtors with a feasible way to repay their debts without going through bankruptcy.

The IVA agreement is designed for individuals who are struggling with unsecured debts such as credit card bills, bank loans, and store cards. It allows the individual to make reduced payments towards their debts over a certain period of time, typically five years, after which any remaining debts are written off.

The agreement is set up by a licensed insolvency practitioner who will negotiate with the creditors on behalf of the debtor. The practitioner will assess the individual`s financial situation to determine how much they can reasonably afford to repay each month. They will then present this proposal to the creditors, who will vote on whether to accept it or not.

If the creditors agree to the proposal, the debtor will make the agreed-upon payments to the insolvency practitioner, who will distribute this money among the creditors on a pro-rata basis. This means that each creditor will receive a proportionate share of the payments based on the amount of debt owed.

Once the agreed-upon period has elapsed, any remaining debt will be written off by the creditors, and the debtor will be released from their obligations. This means that they will be free from the debt and any associated legal action.

The IVA agreement is a helpful tool for individuals who are struggling with debt and want to avoid bankruptcy. It provides a structured repayment plan that is manageable and affordable, while also allowing them to retain control over their assets.

However, it is important to note that an IVA agreement is a legally binding contract, and failure to abide by the terms of the agreement could result in further legal action. Therefore, it is essential for individuals to carefully consider the merits of an IVA before entering into such an agreement.

In conclusion, an IVA agreement is a formal agreement designed for individuals struggling with debt. It provides a feasible way for debtors to repay their debts over a fixed period of time while also retaining control over their assets. However, it is important to seek professional advice before entering into any such arrangement to ensure it is appropriate for your circumstances.

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