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Insolvency IVA
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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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www. Free IVA Debt Advice .co.uk ~ All Rights Reserved.
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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| What Happens
After an IVA ? |
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Enquire about
an IVA Now ! |
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After deciding to go for an IVA, a
debtor can easily avoid any bankruptcy proceedings
against him in case of an inability to pay back the debt
owed to his creditors. This insolvency handling
mechanism used in the UK allows a debtor to avoid
bankruptcy proceedings and provide an alternate
mechanism to take care of insolvency. A Bankruptcy IVA
is a contract between the debtor and the creditors that
outlines the terms for repayment of an outstanding debt.
A debtor can avoid bankruptcy by opting for an
Individual Voluntary Arrangement with his creditors
under mutually agreed upon terms and conditions that are
clearly specified in an 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
Individual Voluntary Arrangement provides an alternate
option to both the contractual parties for settling
their dues in a fast and effective way. It is a legal
contract between the debtor and the creditors outlining
the detailed terms and conditions for repayment of an
outstanding debt.
An insolvent debtor can discuss the
various provisions of an IVA contract with the creditors
in a meeting before entering into an Individual
Voluntary Arrangement (IVA). 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. In this way, entering into an IVA protects
an insolvent debtor from facing any bankruptcy
proceedings. |
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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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