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| Advantage 1 of IVAs |
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An IVA provides
protection to an insolvent Debtor
All the unsecured
creditors who are party to an Individual Voluntary Arrangement
(IVA) are bound by the terms and conditions of the insolvency
contract. Since the views of only the voting creditors are
followed, an unhappy creditor cannot take any legal action or
other enforcement to recover a debt but can submit a claim to
the IVA supervisor and get the dues as per the conditions
specified in the IVA contract.
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| Advantage 2 Of IVAs |
An IVA is less
expensive to undertake
Another advantage of an IVA is that it is significantly
less expensive in comparison to a bankruptcy because the
Insolvency Practitioner is not required to deposit funds in
the Insolvency Services Account as in the case of bankruptcy
proceedings against the insolvent debtor. In case of a
bankruptcy, the funds deposited in the Insolvency Services
Account attract levies and an ad valorem charge of 17% on all
deposits made after the initial £2,000.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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| Implications of IVAs |
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an IVA Now ! |
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An Individual Voluntary Arrangement (IVA) has various implications. Some of the major implications of an Individual Voluntary Arrangement (IVA) are:
A debtor opting for an Individual Voluntary Arrangement (IVA) should have a suitable income or full time employment so as to be able to pay regularly for the Individual Voluntary Arrangement (IVA). A debtor without any steady stream of income has to face the bankruptcy proceedings.
A debtor can lose any protection from bankruptcy proceedings if he fails to abide by the terms and conditions of the Individual Voluntary Arrangement (IVA) that may include missing out on any Individual Voluntary Arrangement (IVA) payments.
In order to get an approval, more than 75% of the creditors should vote in favour of the Individual Voluntary Arrangement (IVA) proposal introduced by a debtor. This makes it necessary for an Individual Voluntary Arrangement (IVA) to be acceptable to a majority of the creditors.
An IVA provides protection to an insolvent debtor from bankruptcy. All the unsecured creditors who are party to an Individual Voluntary Arrangement (IVA) are bound by the terms and conditions of the insolvency contract. Since the views of only the voting creditors are followed, an unhappy creditor cannot take any legal action or other enforcement to recover a debt but can submit a claim to the IVA supervisor and get the dues as per the conditions specified in the IVA contract.
There are no underlying restrictions on future business. Bankruptcy results in dissolution of a partnership and prevention of a debtor from acting in the capacity of a director of a company. In case of a self-employed trader, it is mandatory to disclose the bankruptcy status while obtaining any credit. An IVA does not impose any such restrictions on the debtor.
An IVA is relatively inexpensive to undertake. An Individual Voluntary Arrangement (IVA) is significantly less expensive in comparison to a bankruptcy because the Insolvency Practitioner is not required to deposit funds in the Insolvency Services Account as in the case of bankruptcy proceedings against the insolvent debtor.
Thus we see that the Individual Voluntary Arrangement (IVA) has certain implications associated with it when compared to other insolvency handling mechanisms such as a bankruptcy.
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| Advantage 3 of IVA |
No Stigma attached
with an IVA
An Individual Voluntary Arrangement (IVA) is a personal
agreement between a debtor and the creditors. A Bankruptcy, on
the other hand, is publicly advertised in a local newspaper
and the London Gazette. In this way, an IVA does not carry the
stigma associated with a bankruptcy. |
| Advantage 4 of IVA |
No dearth of future
credit
Unlike a Bankruptcy, the advantage of an IVA is that it does
not compulsorily restrict a debtor from obtaining any future
credit. A bankruptcy debars an individual form having access
to credit for a specified period of time. This provision makes
the bankruptcy proceeding all the more painful because the
credit history of the debtor is blemished forever. However,
there are no such issues in case of an Individual Voluntary
Arrangement. A debtor can get credit without any restrictions
even after signing an IVA |
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