An IVA or Individual Voluntary Arrangement is a legal procedure in the UK that resolves debt problems. An individual may be eligible for this type of procedure if he is burdened with a large debt and wants to avoid bankruptcy. Through an IVA, a mutual agreement is reached between an individual and his creditors. The amount of money actually depends on the state of the debtor. On the other hand, creditors are not required to accept this type of agreement. However, this mutual agreement offers them a better return compared to bankruptcy.
If you are experiencing too much stress with your debt problems, participating in the IVA process is a good option. This would clear your mind of worries. However, there are certain disadvantages with this type of debt resolution. In any type of agreement, it is very important that you carefully read and understand its terms and conditions before entering into it.
VAT involves monthly payments. This monthly payment tends to increase if the debtor earns more. Monthly payments are less likely to be reduced. During the meeting with the VAT company, the monthly payments to be decided are usually very affordable. A mutual agreement would be reached on the affordable monthly payment. However, there are some debtors who do not comply with this type of agreement due to some financial problems they face.
In an IVA, debtors must approve their financial statement, P60 and pay stubs annually for review. In this sense, failure to do so would be considered a violation of the agreement. Many debtors do not meet this requirement. If the debtors can comply and if they also show an improvement in their financial status, the VAT Company will require them to increase their periodic contributions based on their disposable income.
When the VAT Company begins the process of a VAT, the debtor may not create any credit without the consent of the VAT Company Supervisor. In cases such as when the debtor obtains an unapproved credit, this would definitely be considered a serious VAT violation. When the debtor commits to an IVA and then abruptly obtains a large sum of money like winning a lottery, debtors are expected to pay a portion of their debts for the benefit of their creditors.
VAT has some qualifications. You will not qualify for this type of process if your debt is less than £15,000. As a debtor, you must pay as much as you can. This is the reason why you would not have extra money during the duration of the process. The VAT process could last 5 years. It is much longer compared to some bankruptcy proceedings. Experiencing the burden of a large debt is truly a nightmare. It is important that before borrowing any amount of money, you first try to determine your income in a month and find out if you are able to pay your debts with them.