It is important to understand how an IVA works especially if you, or someone you know, are considering applying for an IVA to become debt free.
So, how does an IVA work?
An IVA works by setting up a new agreement between a person with debts over £12,000 and their creditors.
All the debtor’s monthly debt repayments are replaced with one new IVA repayment.
The new IVA payment is based on affordability, and not based on what your creditors think you should be paying.
Once the IVA has been agreed at the creditors meeting, the IVA becomes legally binding on everybody named in the agreement.
Unlike other Debt Management Plans (DMPs), an IVA works on a fixed 5 year repayment time period.
This means that you will not necessarily be able to repay your full debt within this time period.
Consequently any money that has not actually been repaid by the time the IVA reaches the end of the fixed 5 year time period will be legally written off by your creditors.
So there you have it…..
An IVA is a new agreement between you and your creditors, that lasts for 5 years, allows you to repay what you can afford and legally writes off any money that hasn’t been repaid at the end of the agreement.
For a full and in depth explanation of the IVA process take this link : “The debt help solution explained”
If you would like to discuss the possibility of applying for an IVA, then you should call My IVA Adviser now on 0800 088 7503, or fill in your contact details and submit the application form on the side of the page and we’ll call you.
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