If you have been struggling with debt for a long time, you must have heard of IVA. The individual voluntary agreement helps you get rid of debt after a certain time with an affordable interest rate. But there are a few steps to get it done.
Following them the right way will help you see if you are the right fit for it or not. If you’re successful in the process, you will easily be able to lengthen the loan’s payment time and get a discount on your monthly payments. Here’s what you need to do:
Interim Orders
If you have reached a stage where your lenders might be taking legal action against you, it’s important to apply for the interim order. This is a useful tool that helps you from stopping the creditor from being able to pursue you officially through the court.
There’s a strong chance that the insolvency practitioner will get an application immediately. If this Is the case, you should quickly get in touch with the professional. The individual voluntary arrangement is the best way to seek a discount on the accumulated debt amount. Getting the interim order is the first step toward solving the debt problem.
Evaluate Your Finances
Once you have crossed the first bridge and protected yourself against the creditor’s legal action, you must go through your finances. Your financial help will ask for a detailed list of the finances. This will include the pay cheque information, bank statements, and data about the current loans.
This might seem intimidating, but it has a strong purpose. It allows them to work through your finances and seek the best solution. They will predict exactly how tough of a situation you are in. you should also inform them about your expenses, including the travel, rent, and bills.
Creating a Proposal
Once the financial situation has been identified, the proposal is formulated. It’s time that you work with your insolvency practitioner on the proposal. This way, you will pitch to the courts and creditors. This proposal will also ask for a reduction in the monthly repayments and an extension of your loan.
Additionally, the insolvency practitioner will complete a report for the court, and they will evaluate if you are eligible for the IVA or not. Your financial information will be a staunch part of your report. And more appealing to your customers when they have declared you bankrupt. Once you have the proposal in your hand, ensure to get it re-checked.
Reaching Out to Your Creditors
Once you have accomplished the above-mentioned steps, you will have to forward your idea to the lenders. They will also talk about outstanding debts. Every creditor will receive the same pitch from your side. And your insolvency partner will receive the same information.
For your proposal to receive acceptance, around 75% of the creditors must be on your side. Once you achieve this, the IVA will immediately begin, and your lenders will be bound to adhere to the terms and conditions. Since it is a state’s law, they must abide by it.