Once you have selected the Individual Voluntary Agreement as the method of repaying your debt, there are some issues that you should consider further. This IVA advice article will provide you with answers to some popular questions about these contracts.
- How long does an IVA last?
The agreement will typically last for at least sixty months. You will have to pay a small amount every month toward yours debts consistently and through the proper channels. Remember that you are legally obligated to make these payments.
- Will my daily living costs be affected by an IVA?
Your daily living costs will not be affected by the IVA as your income and the cost of a decent living are considered when coming up with the agreement. Your insolvency practitioner ensures that you can continue with your living expenses as long as you have enough surplus money to pay your monthly installments. More details on IVA online can be found here.
- Can creditors possess any of my assets during an IVA?
No. As long as the debt incurred does not have security, then creditors cannot take it. The only instance in which your funds may be in danger is where you have debt in a lending facility which still holds other funds that belong to you. For example, if you have funds in your bank account but have a loan in the same bank, then the bank has the right to take these funds to pay for the debt. In fact, one of the best features of an IVA is that it allows you to keep your things.
- In what case can I cancel an Individual Voluntary Agreement?
You can cancel an IVA if you can show that you are unable to pay any more money or show that you have the funds to pay off the debt without an IVA. Like all other interactions concerning an IVA, your insolvency professional will have to convince the creditors that your circumstances have changed and appeal for a cancellation. If you cannot pay the debt such as if you have a serious accident or are diagnosed with a terminal illness, the insolvency practitioner will have to convince the creditors of these facts. If you have funds, for example from an inheritance or selling an asset for a great profit, you can instruct the insolvency practitioner that you are now able to completely clear all debt without the need for an IVA..
- What happens when an IVA fails or is cancelled?
Given the two reasons discussed for cancellation of an IVA, you must resolve any pending debt depending on your issue. If you have found the funds to clear the debt, you should immediately resolve all problems with your lenders. You should also release your insolvency practitioner from their obligations by paying for any outstanding arrears for their services. This should complete the final stage of your IVA cancellation.