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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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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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| Insolvency IVAs |
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Enquire about
an IVA Now ! |
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An Insolvency Individual Voluntary
Arrangement (IVA) allows a debtor to avoid any
bankruptcy proceedings against him in case of an
inability to pay back the debt to his creditors by
opting for an IVA. This insolvency handling mechanism is
commonly used in the UK to allow a debtor to avoid
bankruptcy proceedings and provide an alternative
mechanism to take care of insolvency. An Insolvency IVA
is a contract between the debtor and the creditors that
outlines the terms for repayment of an outstanding debt.
A debtor can avoid insolvency by opting for an
Individual Voluntary Arrangement with his creditors
under mutually agreed upon terms and conditions that are
clearly specified in an Insolvency IVA contract.
Bankruptcy proceeding against a debtor is quite lengthy
and tedious and is best avoided by the debtor as well as
the creditors. In this context, an Insolvency IVA
provides an alternate option to both the contractual
parties for settling their dues in a fast and effective
way. An Insolvency IVA is a legal contract between the
debtor and the creditors supervised by a Licensed
Insolvency practitioner that outlines the terms and
conditions for repayment of an outstanding debt.
An Insolvency IVA includes calling a creditors' meeting
to discuss the various provisions of the Insolvency IVA
contract. The meeting is supposed to be attended by all
the creditors and a voting process is followed to decide
on the acceptance or rejection of the proposal submitted
by the debtor in the form of an IVA contract. For a
general acceptance of an IVA contract, more than
three-quarters of the creditors present at the meeting
should vote in favour of the proposal. If any of the
creditors present in the meeting are associates of the
debtor, then at least half of the he remaining creditors
should vote in favour of the proposal for it to be
considered accepted by a consensus among the creditors.
An IVA contract can be custom-made to suit the
individual requirements of a debtor. This makes an IVA
contract highly flexible in nature compared to
bankruptcy proceedings that are very lengthy and tedious
for the creditors in general and the debtor in
particular. An Insolvency IVA allows more and more
debtors to settle their debt with the creditors without
undergoing 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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