The recent economic crisis has brought many financial problems for the common man. Almost every other individual is struggling to find a way out of increasing amount of unpaid debts. In the modern world, it has become a trend to make purchases on credit, however, with the increase in job insecurity; many people have opted for cash transactions only.
In the United Kingdom, many people have purchased their houses by taking loans from the banks or take houses already on lease. However, due to the economic crisis many people are unable to pay off their debt completely or partially which in turn has lead to the repossession of their homes. In 2009, it is estimated that about 75000 homes would be repossessed due to non-payment of debt.
In this problematic condition, the government is making all possible efforts to solve the problems of the general public and to help them pay off their debts. IVA is one such facility launched by the government to support those individuals who are unable to get loan due to a drastic fall in their credit scores, which are utilized by most institutions to establish credit worthiness of a client.
The Individual Voluntary Arrangement (IVA) is designed to help people get rid of their debts as quickly and affordable as possible. Any amount that the applicant cannot afford to pay is written off by the creditors as per the agreement. The process is rather very simple and understandable by any individual. The first step is to make sure that IVA is the right choice for the intended applicant.
When it has been established that IVA would provide the most beneficial solution in the particular case of the intended applicant, then an assessment of the income and expenditures of the applicant is made. Based on these assessments various arrangements are formed, which might be feasible for the applicant to make payment of the debt.
Generally, the balance of income and necessary expenditures is allotted to the repayment of the debt in monthly installment for a term of 60 months. You can also take the help of an interim court order to prevent the creditor from taking any legal action against you. This is helpful as it will prevent the creditors from repossessing the property of the applicant.
After the arrangements are settled, the creditors are called in for a meeting in which they are asked to approve or reject the individual's voluntary arrangements. For the IVA to be approved, at least 75% of the creditors must vote for its approval. If less than 25% of the creditors reject the arrangements, the IVA would still be approved.
The reason for the increasing popularity of IVA is that it provides an opportunity to individuals facing insolvency to make sure that their property is not taken away from them. They can protect their property such as their home from being repossessed by the creditors due to default, and repay their debt in easy installments that are affordable by them.
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