Government IVA Advice
Government introduced The Insolvency Act 1986
The IVA – Individual Voluntary Arrangement was established by the UK Government in 1986 by The Insolvency Act 1986. The aim was to provide an alternative debt solution to bankruptcy for the growing number of people with debt problems.
The Government introduced the IVA (Individual Voluntary Arrangement) procedure was to be an effective solution to serious debt. With an IVA you agree to pay your creditors only what you can afford, usually over a five year period. The creditors write off the rest of your debts so that at the end of the five years you are debt free.
The Government Introduced IVA
The Insolvency Act 1986 is the statutory legislation that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. Elements of the act have been updated by the Enterprise Act 2002 which came into enforcement on April 1st 2004.
The Insolvency Act 1986 essentially governs issues relating to personal bankruptcy and Individual Voluntary Arrangements and all administrative orders relating to company insolvency.
After taking detailed debt advice an IVA may be a suitable solution
In the UK, Individual Voluntary Arrangements (IVAs) are a formal alternative for individuals wishing to avoid bankruptcy.
The IVA was established by the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an Insolvency Practitioner. Usually (but not necessarily) the IVA compromises only the claims of unsecured creditors, leaving the rights of secured creditors largely unchanged.
An IVA is a contractual arrangement with creditors and can be as flexible as an individual's own circumstances; they can therefore be based on capital, income, third party payments or a combination of these.
An IVA is an alternative to bankruptcy; however they are not mutually exclusive. A person can propose an IVA after they have been made bankrupt. If an arrangement is approved post bankruptcy then the debtor can apply to the Court for an annulment of the bankruptcy order such IVAs can only be proposed whilst the bankrupt is undischarged. If an IVA is proposed after a bankruptcy order has been made, it is now also possible to nominate the Official Receiver to be the supervisor of the arrangement. The Arrangements offered by the Official Receiver are very restricted and have not proved very popular. This type of arrangement is called a Fast Track Voluntary Arrangement and is only suitable in certain cases.
Government IVA advice in Scotland
In Scotland there is a similar procedure to the Individual Voluntary Arrangement called a Protected Trust Deed (PTD). The Trust Deed, although similar to the Individual Voluntary Arrangement in many ways, lasts only for 3 years as opposed to the normal 5 year period that constitutes the vast majority of IVAs. Trust Deeds are an alternative to bankruptcy in Scotland which is referred to as Sequestration.
Using the Individual Voluntary Arrangement (IVA) procedure
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health.
This procedure is not to be confused with the informal procedures being dished out by non-regulated organisations as advertised on television and in the daily tabloids. Those other organisations have already been adversely criticised by Watchdog.
If you wish to discuss the IVA procedure and understand how it can help you please complete the following form or telephone Freephone 0800 074 6918.
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