Essentials
of iva advice explained
Individual voluntary agreement
was introduced as part of insolvency Act introduced in the year 1986. The aim
of this law was to provide an alternative solution to people who are facing
bankruptcy problems. An iva advice supports the interests of the debtor as well as
the creditor. iva is a legal contract between the debtor and the creditor
that enables the debtor to pay only a certain percentage of the debt and become
free from the debt trap. The loan interest is frozen in this system so that it
does not grow further.
The eligibility for an IVA is
depended on many matters like one’s financial conditions and personal
circumstances. Residents of England, Wales and Northern Ireland are eligible
for iva
advice scheme no matter even if they are presently residing outside. But
persons who are residents of Scotland or outside United Kingdom are not
considered for iva’s benefits.
iva advice is set up only if
the total unsecured debts exceed £ 15,000. iva is an expensive arrangement
and therefore this cannot be arranged for smaller debt amounts.
Another condition is that the
debtor should be able to give at least 30 % dividend to his debtors. Iva
that offers less than 30 % of what is due to creditors is not accepted by them.
iva’s benefits will be
available to a person who is insolvent which means he does not possesses any
movable or immovable property.
Another condition for getting iva
adviceis that the debtor should be having debts with three different
banks or creditors. A person who have three accounts in the same bank or who
owes debts to the same person borrowed from him on three different occasions
for three different purposes will not be eligible for iva's benefits.
This facility will be available
to persons who have a regular income, which should not go beyond a minimum of £
200. This is necessary to show that you can pay a monthly sum towards debt
repayment for the next 60 months.
The IVA team will verify whether
you qualify for the IVA agreement based on the above criteria and if you are
eligible, they will inform whether you qualify for the scheme or not.
Fortunately,not all these criteria are rigid and debtors can make changes and
give exemption to certain conditions wherever they find it necessary. If you do
not qualify for IVA settlement, they may request you to try some other methods
like debt counseling or debt management.
Click here to know more about individual
voluntary arrangement