The IVA or Individual Voluntary Agreement is a formal or legal statement between the lenders and a borrower. With this arrangement, a borrower can reduce his monthly installment repayment of multiple debts with ease. As a matter of fact, the interest rate charges are fixed and monthly loan repayments get lowered. Generally, this legal proceeding is carried out by a licensed professional such as Insolvency Practitioner or IP. This agreement requires the consent of court. There are many lending institutions in the market who give borrowers an access to such a practitioner to get out of financial quandary with IVA help or approval.

The formal meeting with the Insolvency Practitioner determines whether or not an IVA services are suitable option for resolving financial debts. The IVA provider discusses about the monetary position and assets with the you, so that he can draft a plan letter outlining a suggested solution to your debts. This proposal depicts the maximum amount that a borrower can afford to repay his undue debts. With a approval from the borrower, copy of proposal is sent to the lenders. The lenders are requested to confirm the amount of money, so that further proceeding can be carried out.

As a matter of fact, the IVA services help borrowers to write-off approximately three-fourth of total outstanding debts. The Individual Voluntary Agreement is designed in such a manner that both borrower and lenders are on the safer side. There are many advantage of using the IVA services such as:

1) Protection from lenders through the Interim Order and IVA. As a matter of fact, once the proposals have been approved, the lenders by law are no longer authorised to demand payments. Moreover, the lenders cannot take any legal action against you till the terms of agreement are adhered to or any changes negotiated and duly notified by your IP

2) With proper monthly payments, the borrower can be debt free in the time period of 5 years or 60 months. This help the borrowers to repair their credit rating within a year after the completion

3) IVA help is a government approved scheme. This agreement is a legally binding document when compared to most debt management plans

4) Unlike bankruptcy, the IVA help does not adversely affect the job. As a matter of fact, these services are a private agreement which means that it is not deemed as being in the public interest. It is not publicised in the local press

5) Applicable debts that are included in this agreement include those incurred through catalogues, personal loans, student loans, store cards, credit cards, overdrafts, business loans and debt left over from home

6) The borrowers are able to continue their business, trading and generating income to repay the lenders rather than losing all your personal assets. One can run a small business without it is being adversely affected

7) Only a percentage of debts are repaid, the rest are written off after the five-year period. The interest rates are fixed so no other charges can be added legally

To conclude, it can be said that IVA is a legal agreement with an approval from the court. It is different than debt management plans, which does not have any legality. For many borrowers with multiple debts, this legal agreement is considered as way to a debt-free future.

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