An individual or an entity turns to borrowing when the present cash flow is insufficient to address the ongoing or future requirements. In this process, a borrower uses the future income before earning it. And, the lender gains in the form of interest for taking the risk in parting away with his money. In legally binding cases of borrowing and lending, the lender may compensate his loss from borrower’s assets, if the borrower fails to repay. Given the recent economic condition, where loss of income is a common phenomenon, borrowers might often struggle to pay debt instalments. For borrowers residing in UK, Northern Ireland and Wales facing bankruptcy in unsecured loans, an individual voluntary arrangement or IVA can provide the solution.
Individual Voluntary Arrangement
IVA is a legal arrangement under Part VIII of Insolvency Act 1986. By an IVA, a borrower formally proposes to the lender the repayment of the loan in affordable monthly instalments. It is an alternative to bankruptcy, and must be processed by an insolvency practitioner. The repayment is scheduled for a particular time period. During and after this, the lender cannot take any legal action against the borrower to recover the remaining amount of debt. Lenders agree to such arrangements only because the return from this is normally higher than bankruptcy. However, if an individual fails to honour the IVA, the case of bankruptcy is unavoidable. Therefore it is paramount to notify the insolvency practitioner of any situation that might affect the instalments, as soon as possible. Once the agreed instalments are paid, the borrower becomes free from all obligations. One must understand that although it is better than insolvency, it still negatively affects individual’s credit rating.
Expert Guidance is the Key
Since there are several alternatives to bankruptcy, and one solution doesn’t fit everyone, expert advice is essential. For expert guidance and advice regarding debt management, and consultation of insolvency practitioners, one may visit http://www.ivadebtcalculator.co.uk. The website provides a debt calculator, with which one may find out whether he or she is eligible for IVA. The website also provides clarity regarding available alternatives for debt management. Founded in 2001, the company has a wide experience in providing debt service and debt management solutions in the UK market. So far, more than 20,000 individuals have been benefitted from these. For individual consultations, one may leave their call back number at ivapros.co.uk or directly contact the registered office.