Debt Consolidation is not the Only Alternative!
What is the IVA Process
and Why Consider it as a Debt Management Alternative?
The successful execution of an IVA, as debt management tool, has prompted many in UK suffering from financial troubles, to seek precise answers to what is the IVA process. While few are looking forward to convincing propositions, many other are simply skeptical of the supposed appropriateness of the IVA i.e. Individual Voluntary Arrangement process. The reasons are obvious. Those in debt troubles have already attempted various propagated measures and more or less, have been unable to reach at satisfactory solutions. With various covert implications to bother, it is rational to check the associated clauses of any answer, even if the question is what is the IVA process.
About the IVA - Individual Voluntary Arrangement
Let’s begin answering the what is the IVA process question, by first understand the concept. IVAs or Individual Voluntary Arrangements are a formal, legal proceeding to ensure debt relief. As per the Insolvency Act, 1986, IVAs establish a formal understanding between the debtor and creditor, which in turn helps them achieve mutually beneficial answers to the difficult debt woes. Both debtors and creditors advocate in favor of IVAs, because the former benefit by easier payment terms and reduced loan charges, while the latter enjoy advantages to recovering otherwise bad debts. An IVA, though legal, is a simple process with abundant scope for all involved to negotiate and renegotiate and thus reach at viable terms.
What is the IVA process?
With the IVA concept defined, the next imperative question is what is the IVA
process and how does it helps achieve the stated benefits.
The IVA or the Individual Voluntary Arrangement is the process, which begins
with the need to finding debt solutions and ends by imparting reasonably
substantial options. Herein, once the debtor realizes the mounting debt crunch
and decides to find a way out with IVA, the IVA consultant / debt advisor, works
out an agreement detailing out planned payment stages. Therefore to initiate the
IVA process, consult a debt manager and check upon the suitability of IVA with
your personal financial circumstances in forefront. If the advisor suggests
going ahead with the IVA notion, sit with him and prepare a proposal. In the
stages that follow, this proposal is presented to the Company Insolvency
Practitioner (IP), who in turn exhibits the same to the creditor / creditor
group.
Upon receipt of the draft proposal, creditors arrange a creditor’s meet where
they discuss the nitty-gritty of the proposals. Here, they might accept it as it
is or reject it or might propose to accept with modifications. Based upon the
same debtor could suggest another set of changes. Post the various
modifications, once a mutually acceptable proposal is drafted, both parties are
obliged to follow it. As a debtor, it becomes essential to make the promised
payments on time and as for creditors, they cannot pose any demands after the
IVA is in place. As evident, what is the IVA process is a simple question, with
effective solutions to present, for all concerned.
Articles on IVAs
What is an IVA? The IVA Process How to Start an IVA
Advantages & Disadvantages IVA Payments