Understanding what an IVA can do for You

IVA’s will not make your debts go away but they may be able to show you how to meet your financial obligations and get your creditors off your back. IVA’s are not for everyone but if your debt advisor suggests that this option is open to you then it would most likely be advisable to take it.

The final decision to go ahead with an IVA will be strictly your decision, which should be an informed decision. This mean you need to know exactly what an IVA is in order to fully understand what you are committing to.

To begin with, an IVA is an individual voluntary agreement. It is a legal and binding agreement that will be worked out between you and your creditors by an Insolvency Practitioner. Once you have fully understood the terms of the agreement and have signed it then it becomes your obligation to follow through with what you have promised to do by signing the agreement.

Prior to getting to this point your Insolvency Practitioner has done all of the negotiating with your creditors. He will have contacted each of your creditors and negotiated with them as to how much of your debt you can realistically pay back within a certain period, which is between 3-5 years. In many cases, creditors will relinquish up to 75% of what they are owed in order to be able to recoup some of the money owed. Once this has been done with all your creditors then the monthly payments required to pay out these debts will be determined. How much you can afford will already have been calculated by the IP. Once everything has been explained to you and you agree it goes into contract form for your signature.