Effects of IVA on Debtor’s Lifestyle & How to Manage

An IVA is a legally binding agreement between creditors and the debtor which provides the debtor an easy way to pay all the loan at relaxed rates without burdening himself. As an example, a debtor may offer his creditors to pay a specific amount of his salary each month and in its return, creditors may snuff out a few of the money they lend to him. This all procedure is normally determined by using IVA Calculator that help estimate how much a debtor can pay as monthly affordable repayments.

But here arises a question as if everyone qualifies for an IVA agreement? The answer is No. Not everyone is eligible for IVA agreement and the people who qualify to be eligible ones must have a proper and regular source of income. Since there isn’t any minimum amount condition for IVA but if the debtor is unable to pay a reasonable amount on a monthly basis then creditors might not accept his IVA proposal. In such case, another debt management plan named as Debt Relief Order will work for the debtor.

Now it is particularly notable thing that all kinds of debt can’t be included in an IVA. It deals with only particular, but most of the types of debts, i.e. credit cards, personal loans, overdrafts, electric and gas arrears and payday loans. Other loans, including mortgages, student loans, etc., are to be paid separately other than an IVA.

Before going for IVA, there are a few important details that one must keep in mind.

Debtor’s Credit Rating:
IVA details will be held on debtor’s credit file for six years, starting from the day IVA agreement is signed. Once this tenure completes, debtor’s details will be removed from individual insolvency register after approximately three months.

Moreover, debtor will have to stick to the budget agreed during the agreement and cannot miss a payment. If debtor misses any payment, his IVA will be extended to make up the debt.

Debtor’s Property:
Now if the debtor owns a house then its value will be taken into account as part of an Individual Voluntary Arrangement. Normally, houses cannot be sold off under IVA but it totally depends upon the amount of equity the households. After the valuation, debtor may have to remortgage his home to raise the flat amount and then will put it into the IVA.

In case a debtor is not able to re-mortgage, he will continue paying the usual monthly amount decided for an extended tenure of 12 months.

Debtor’s Job:
IVA usually doesn’t affect the debtor’s job, but if he belongs to a particular field like property, finance, law, etc. then he might not be able to continue that job or if continues, then he will be subjected to a few terms and conditions which are included in the IVA.

To avoid it, debtor will have to check his employment contract. Furthermore, he can ask to speak to his HR department in confidence. In addition to that, if the income of debtor increases during IVA then he will have to bring that into the open and in case he doesn’t, he will be breaking the law.

In brief, the debtor cannot manage any debt management solution at his own. He must seek for professional support and advice from financial experts. For free debt advice UK is rich in companies but to pick the best one among them is the real task. IVA Experts UK is one of the leading debt solution providers that can help you to unburden yourself from your debt stress.