Should I Consider An IVA or Petition for Bankruptcy?

March 26th, 2008 IVA Information Administrator

Trying to decide if an IVA is right for you can be a difficult process. There are so many television commercials, print ads and information on the Internet that it is hard for people to decide what is fact and what is fiction.

Undoubtedly the best way to determine if an Individual Voluntary Arrangement is right for you would be to discuss your situation with an IVA professional. Someone experienced in assisting people to seek help and assistance with an IVA to help resolve debt problems.

Some Basic IVA Advice

It would be wrong to consider an IVA as a good solution for your debt, even though the amount you owe and your monthly payment can be significantly reduced, if you are just making it from month to month without paying any of your bills.

Additionally, it would be a serious concern if you were to enter into an IVA knowing in advance that in the near future you will have a reduction in income and thus unable to make your agreed upon payments.

An IVA can provide you with protection from your creditors and most importantly, with a clear and mutually agreed repayment plan which your creditors must abide by.

How to Really Tell if an IVA is Right For You

The only way to determine if an IVA is right for you is to talk to an IVA professional. You can ask any IVA question you might have now by using the chat box on the top right side of this page or you can talk with the IVA professionals at Myvesta UK for free help and advice.

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Is An IVA a Government Approved Process?

March 27th, 2006 IVA Information Administrator

IVA proposals can only be put together and presented to an individuals creditors by a licensed Insolvency Practitioner. At the time of this writing there are only about 2000 licensed Insolvency Practitioners in the UK.

The Individual Voluntary Arrangement was originally designed to provide relief to debts generated as a result of business insolvency. In recent years, increasing levels of consumer debt has led to many insolvent individuals with non-business generated debts seeking the legal protection offered within an IVA.

This increased activity has resulted in proposals to restructure the current IVA legislation in order to address shortcomings within the current IVA regime. The Insolvency Service set up a Working Party of stakeholders to discuss and consider how and what improvements should be made to balance the needs of both the creditor and debtor. This consultation process resulted in the proposal for an introduction of an enhanced IVA regime to build upon the current legislation.

Essentially, it has been proposed that the current IVA structure should remain to cater for business trader debts and more complicated cases. However, the need for a two tier Simple IVA (SIVA) mechanism has been outlined.

Here an individual with debts of less than £25,000/£30,000 would be eligible for the proposed Simple IVA 1 (SIVA 1). An individual in such circumstances would be able to enter into this arrangement without creditors voting on the proposal so long as the return in the SIVA 1 would be better than bankruptcy.

The SIVA 2 arrangement would cater for individuals with debts of £25,000/£30,000 but not higher than £75,000. In such circumstances an individual’s creditors would be able to vote for or against the proposal but would not be able to attach any modifications to the arrangement. The acceptance of the SIVA 2 would be based on a simple majority of debt vote as opposed to the current 75% requirement that constitutes the current IVA legislation.

It is anticipated that these legislative changed will be introduced at the end of 2006 or early 2007.

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