An
Individual Voluntary Arrangement (IVA) is a legally binding arrangement
introduced by The Insolvency Act of Parliament in 1986 as
an alternative to bankruptcy. Under this agreement your creditors
receive a percentage of your debt as settlement of the amount owed.
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| You
will appreciate that your creditors will want, and are entitled,
to receive as much as you can afford. This is where we come in.
We prepare a statement of your affairs which is in due course
presented to your creditors.
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We
calculate the monthly amount which you can afford to offer to your
creditors . This figure is determined by taking into account the
difference between your income and expenditure. We also take into
account how much you owe.
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Once
agreed, this monthly sum is paid for a finite time, usually five
years. At the end of this period, you are deemed to have made a
"full and final settlement" and the remainder of your
debt is written off by the creditors.
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| Summing
up, an IVA offers your creditors a settlement which is far more
beneficial to them than bankruptcy. They are guaranteed payment
because it is a legally binding formal arrangement. You will (in
most instances) be paying back less than you owe but will be settling
your debts to the best of your ability.
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