IVA which stands for iva government scheme is actually a formal as well as legally binding settlement process between you & your creditors in order to pay back the debts over a certain period of time. It means it’s authorised by the court & your lender has to stick to it.
Government debt help scheme can be flexible in order to suit all your requirements but it can be pretty costly & there are certain risks to consider too!
How an IVA works
An Iva government scheme needs to be set up by a licensed person, called an insolvency practitioner. It'll be an accountant or a lawyer. And the insolvency practitioner will charge a certain amount of fee for the individual voluntary arrangement meaning. Always keep in mind that these can often be potentially high as well as are based on the amount you repay through the iva government scheme register. Your hired insolvency practitioner will directly deal with your lender throughout the life of the Government debt help scheme.
So, if you opt for a professional debt management firm for an IVA, try to figure out how much fees they can charge before you determine. A professional debt management firm is likely to be more costly as they charge a certain amount of fees on top of the insolvency practitioner's charges.
How the repayments work
So if you decide to get an Iva government scheme, then you'll work out a repayment scheme with the insolvency practitioner. It can be a lump sum payment, a monthly payment, or even a combination of both.
This repayment scheme must be based on the amount you can easily afford & the lenders will have to agree to it. So in the case of the monthly payment, the Iva government scheme can last for 5 or 6 years.
Any fees will be directly paid to the insolvency practitioner. And they'll distribute the money to your lenders.
However, if you are not able to provide enough to pay your debts in full by the end of your individual voluntary arrangement meaning, then you won’t have to pay the rest. The insolvency practitioner must advise you about this.
If you come into money
And, in case, if you get a windfall during your Iva government scheme, for instance an inheritance, it'll be taken & paid to your lenders. So, if you figure out that you are due a certain amount of money because of some circumstances that occurred before the IVA, your lenders may have the right to claim it as well – even if your Iva government scheme has finished.
On the other hand, you can always get in touch with your nearest Citizens Advice for expert assistance if you get a lump sum after your Iva government scheme finishes.
Call our national debtline number 03338803165 if you have any questions about the Iva government scheme.
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