You should choose an IVA if your financial situation has taken a turn for the worse and you are not sure if you can pay back your debt. If this is the case, an IVA might be the best option for you.
Through an IVA you can start repaying as much as you can out of your debt over a fixed period of time. After this period of time is over, you will be debt-free.
You will need a licensed Insolvency Practitioner to take a look at you situation before applying for an IVA. He or she will have to present your creditors with a report stating that an IVA is suitable for you, basted on what he or she analyzed concerning your monthly payments. If you are truly unable to make the payments, an IVA will be granted. However, 80% of your lenders (we’re referring here to debt value) must agree to this IVA and be clear about it’s terms.
What if my IVA is approved?
If your IVA has been approved, you will have to make monthly payments as stated in the IVA. The Insolvency Practitioner will redistribute these payments to your creditors. You may have to release equity from your property, but you will have protection against any further actions taken by your lenders. If you stop making your monthly payments, the lenders might force you into bankruptcy.