Can I Get A Loan With An IVA

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By : Admin
Loan 25/10/2017 01:08pm
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Wondering what an individual voluntary agreement (IVA) is and if you can get a loan with IVA? To clear everything, here in this article we have tried to provide every detail you need to know about IVA.  Getting a loan with an IVA can be useful for people who are struggling to get the cash during emergencies, while avoiding bankruptcy.

What exactly is an IVA?

IVA, individual voluntary agreement, is an alternative contract for individuals who wish to avoid bankruptcy. It constitutes a formal repayment proposal that is presented to the creditor of the debtor via an insolvency practitioner. Usually IVA only comprises the claims of unsecured creditors, Insolvency practitioners charge and ongoing fees. Such arrangement with creditors can be flexible depending on an individual's own circumstances. It will be based on capital, income and third party payments.

IVA often has time restrictions. So, if a debtor fails to repay within the chosen period, the rest of the debt will be written off. IVA contracts are perfect for those who are overwhelmed with their monthly outgoings. They are considered to be the best way to avoid bankruptcy.

What is the procedure?

When a person applies for IVA, the company will arrange a meeting of creditors. The lender will then decide if they are willing to accept the arrangement.  Lenders have the right to refuse the IVA and ask for different terms. They are not legally obligated to approve the proposal. However, most of the lenders accept them as it is the best way for them to get back their money. They will never want you to go bankrupt as they will never be able to recover the debt after that, especially if you do not have any valuable assets such as a car or house. At least 75% of the creditors approves for IVA. Generally, a debtor is give fourteen days to consider the new proposal.

Is an IVA the best available option?

When it comes to settling of a debt and avoiding bankruptcy, IVA is the best available solution. The creditor will get at least some of the loaned money back. On the other hand, debtors can start working towards improving their financial situation. However, there are several instances in which an IVA might not work. If a debtor has no other way to pay the debts, then better results can be obtained from bankruptcy. Adding an IVA will only make the problem worse. Even with the decreased rate they may still not have enough cash to cover the payments.

How much will an IVA add to your debts?

IVA will add extra charges and fee to your debt. In many instances, such cost can be high and add into the balance. Therefore, when applying for an IVA you need to be careful. This makes IVA only suitable for debtors with substantial debts.

How do IVAs work?

When a person opts for IVA, they will no longer have to deal with their original creditors.  It becomes illegal for the lender to pursue the debt any further. Instead, with the assistance of the IVA practitioner, the debtor will make the necessary arrangements and make the payments directly to the company. It will be the responsibility of the practitioner to evenly distribute the funds amongst the creditors. A small percentage of that payment will go towards paying the fee of the admin. If even after that a person fails to meet the obligations, they will be offered a second chance to send the money. If they fail again the agreement will become void and they will be back to square one. When it comes to IVA payments, you will be unable to apply for any another arrangements if you mess it up.

Conclusion

When applying for a loan with an IVA, the basic rule is that you need to be well informed and careful. It might not be always possible to get the money you are in need of. Besides, you need to ensure that you are not breaking any of the terms mentioned in the contract. Read all the documents carefully ahead of taking any decision. So, if you are in need of quick cash then simply apply for it with an IVA and get a response back in no time.