Individual Voluntary Arrangement
The use of Debt Collection agency is beneficial for both the debtor and the creditors. Once you enter into the debt related financial issues either being as a creditor or debtor you have to fix it and most of the time your skills to deal with financial matters are unable to manage these obligations or recoveries so have to take help from the Debt Collection Agencies.
Being a creditor to avoid the threat of bad debts and to make your recovery you enter into the contract of Debt collection agencies and take help from those. You can recover your amount either by internal source or whenever you think your outstanding amount is entering in the bad debt zone or taking long time to recover you take the help of Debt collection agencies which provide different solutions and made third party contracts and are regulated by Fair Trade Debt Collection Practices Act. It help you to get out of the dark tunnel which otherwise will not be possible.
Same wise when you become stressful with financial condition and can’t be able to manage and fulfill your financial obligations, it becomes headache to manage large number of creditors then you take help of Individual Voluntary Arrangement. It is a debt managing program you consider when you have large number of creditors and to avoid bankruptcy you take help of IVA in which instead of paying to too much creditors and to pay massive amount you only have to make one monthly payment to IP on a reconsidered interest rate which suits your present financial scenario. The new interest rate will be fixed for a predetermined period of time after which you will not be liable for any outstanding amount.
The “MUST BE’s” for an IVA
There are certain requirements for IVA such as you have to be indebted to two different creditors and that must be sanctioned in form of three loans. And the third requirement is that there must be specific amount that you can be able to make monthly payment out of your disposal income otherwise the agreement will be cancelled and the creditors can sue you. Otherwise there can be other solution that can be considered that best suits your scenario such as Personal Debt Consolidation program and some others.
It is necessary for you to make your financial condition and all assets visible to the consultancy agency. The company that you are hiring for IVA advice should be reputable enough and should have a sound background.
The cases that come under the head of IVA’s
The types of debt that can be dealt with IVA advice are credit card loan, personal loan such as house loan, auto finance, borrowing from friend and family and some other unsecured loans. And certaintype of loans can’t be covered under this head like secured loans, child support agency and some other areas.
In IVA there is an Insolvency Practitioner who has a strong accountancy background and is responsible for all proposals and agreements among you and creditors. At the time of showing interim order to the court and making of proposal this IP act as nominee while after that it act as supervisor. The for-most advantage of `IVA is that you only have to pay for a specified period of time after that you are not liable for anything. According to new interest rate you usually have to pay lesser amount in total than the previous one. The time span for recovery made by IVA is usually up to 5 to 6 years after which outstanding loan is pardoned. It is necessary and basic requirement that 70% of the creditors with respect to value should agree to the proposal in debtor creditors meeting held by IP otherwise contract will not be acceptable. If the amount you owe is over $10,000 then IVA debt management could be the appropriate solution for you.