IVA is an alternative option to avoid bankruptcy in the critical financial situations. It was established and governed by part VIII of the Insolvency Act of 1986 and define a formal repayment proposal presented to the creditors via an Insolvency Practitioner.The Insolvency Practitioner charge initial and ongoing fees that are in addition to the debts.An IVA is a contractual agreement between the creditor and the debtor and can be as flexible as per individual circumstances and is based on capital and income of the debtor.
The creditor takes a decision at the creditor meeting called to consider IVA Proposal, which can either result in its approval or getting dropped off. Yet the returns are higher than the bankruptcy, and in order to win the game you have to accumulate 75% of the vote by the creditor. Otherwise, losing the game would mean knocking at the other door. However, an IVA is originally devised to provide relief to the debtor and is burdened with acute financial distress.
An individual can propose an IVAafter he had been declared a bankrupt, though in such cases one can move to the Court for annulment of the bankruptcy order. Basically, an IVAcan only be proposed when an individual is not declared as bankrupt, but in case an IVA is proposed after the bankruptcy order is issued, it is possible to nominate the Official Receiver to be the supervisor of the arrangement. To add, the arrangement offered by the official receiver is restricted, and often it is called as fast track management, though you cannot use this every now and then as it is privileged only in the certain cases.
There are certain advantages and disadvantages with an IVA in compared to other debt management solutions, which specially depend on individual to individual, the profession and circumstances. As such in order to get the best advice it is always desirable rather recommended contacting Financial Advisor who can only suggest the best possible solutions An IVA is a private agreement between the creditor and the debtor. The debtor and creditor are listed publicly on Personal Insolvency Register and will be recorded by the credit rating agency. This will make very difficult for the debtor to get credit from any financial institution if anything gets wrong the matter. Sometimes some frauds also jump in the business and put you in the terrible mess. So make sure to investigate and take a right decision.