FAQs about Individual Voluntary Agreement

An Individual Voluntary Arrangement or IVA for short is an agreement or a contract between a debtor and a creditor. In the agreement, debtors are obliged to pay monthly a certain part of their debts to their creditors over a period of time provided that the creditors will not make a move against the debtor like petitioning for bankruptcy, suing their debtor, etc. The British Parliament enacted it as part of Insolvency Act of 1986 in order to prevent bankruptcy. It also encourages the debtor to pay their obligations despite financial difficulties.

Many people would probably ask why they should resort to IVA and not to bankruptcy. They also ask if this mode of payment would guarantee their interests in the midst of financial burden. Here are the basic questions people ask about IVA

What should I choose? Is it IVA or bankruptcy? I would probably choose IVA. It's because it offers you a good chance in paying your obligations without having to resort to selling or putting up for sale all your assets just to pay off your debts. You are given a certain period of time, like for example three years, to pay all of them on a monthly basis in an affordable amount with lesser interest.

Should I apply for IVA if a County Court Judgment has been issues to me? Well, absolutely yes. County Court Judgments or CCJs are court orders obliging a debtor to pay his creditor. If you don't follow it, then your creditor has now the right in filing civil cases against you. To prevent this, apply for IVA.

So if you are in a great burden of paying all of your creditors, you should look into to IVA. It offers the most convenient way of paying your obligations to your creditors. There is a maxim which states that "when two evil exists, choose always the lesser evil." In choosing between IVA and bankruptcy, I'd rather you choose the former.