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Another major benefit of an IVA is that it can make you debt free in usually five years. By now you should know if you are qualified for an IVA or not, and you should know who to contact in order to start the procedures. You should have a serious talk with your Insolvency Practitioner; he can give you advice on how to make a plan on how to divide your monthly income in order to become debt free. Another benefit of an IVA comes from the fact that you and your creditors agreed on paying back only a part of the sum you owe, so you should make sure that your monthly payments are reduced to a level you can afford, after all that is the point of signing an IVA. You have to be very careful to make the payments in time, you should not be late with your IVA payments, because then the document will become invalid, and you will have to face the consequences. The only condition to become debt free is that you make your payments in time; this is not too much to ask, isn’t it?
Another benefit of an IVA, compared to bankruptcy, is that everything remains a personal matter. Only you and the Insolvency Practitioner are involved. No one from the neighborhood or from your office needs to know. With an IVA, everything is personal. This might not seem as a great advantage, but you can avoid many awkward situations when no one knows about your real financial situation. Because the IVA remains a personal business, your career will not be affected at all like in case of bankruptcy. You might hold any high functions which you could not do if you declared bankruptcy. Here is only one example: if you declare bankruptcy, you can not act as a director of a limited company. There are no such restrictions in case of an IVA, so this is a major benefit if you run a business.
Probably the greatest benefit of an IVA is that you won’t risk losing your assets. This is a very important matter, so be careful when you sign the proposal and try to make so you won’t lose your assets automatically if you fail to comply with the terms. Do not worry, your Insolvency Practitioner knows this, and he will try to deal with your creditors in a way so they will accept the proposal with excluding your property. Of course, he will have to persuade your creditors that you can satisfy them and the outcome would be better for them by agreeing to the terms of the IVA. So, you should not worry about it, this is your Insolvency Practitioner’s job, and he will write an arrangement which will be beneficial to both parties.
There are some other benefits of an IVA: there are no restrictions regarding personal credit, but be prepared: it might be very hard to obtain a credit during the IVA. If in the mean time you get back on your feet financially, you can reduce the period from five years to only three years, of course this means that you will have to pay a little bit more money every month.
Now let us see what benefits offers an IVA to the creditors. First of all the costs of administering an IVA are smaller than in the case of bankruptcy, so the creditor will get back more money. This is the main reason creditors accept the proposal; they see that you will pay them back more money than they would gain if you declare bankruptcy. Another advantage of IVA is that the creditor can claim tax relief against bad debt. These two are the major benefits for creditors.
As you could see, an IVA is good both for the debtor and the creditor, so you should not have any trouble obtaining it. Note that you will have to be very careful and never be late with your payments, so you can enjoy all the benefits of an IVA. Do not forget: you have complete anonymity, it does not affect your career, creditors can not bother you during the IVA, you can keep your assets and the most important: there is a possibility for you to become debt free, so take it! If you respect the terms of the proposal, you will be debt free in five years, or even less. So take the opportunity and become a free person! |
