What is an Individual Voluntary Arrangement?

Often referred to as a legally binding agreement, as well as IVA, this agreement is drawn up between you and relevant creditors that are set up, using an Insolvency Practitioner.

This agreement allows you to pay a lot less than the required debt within a specified period, after which you’ve made all the necessary payments, your creditors will write your debt off.

If you choose IVA, your assets will be protected, and a substantial amount of debt will be paid off, all of which you can afford to pay monthly instalments for. These instalments usually range from R1500 per month, depending on how much you owe, along with a lump sum, acting similar to a deposit.

Do You Qualify for an IVA (Individual Voluntary Arrangement)?

Upon applying for an IVA, an IP (Insolvency Practitioner), will set up an appropriate proposal that presents your creditors with what you’re able to pay them.

After they’ve been presented with it, creditors will have the opportunity to vote whether, or not; they’ll accept your proposal.

If creditors hold up to 75% or more value of the debt you owe, they have to agree to your proposal to qualify for the IVA.

If accepted, you’ll have to pay your IP an amount of money, serving as an instalment each month. From this amount, your creditors will use a percentage to for what you owe them for their services, as well as divide the rest between all your debts, to be able to settle it appropriately.

The general IVA can last up to six years, to get their clients debt-free.

If found that you have equity in your home, such as mortgage, you could be asked to apply for specifically, a secured loan. If this is the case, you’ll have to pay a lump sum, referred to an equity release clause. If your loan application is rejected, your IVA will be extended and continued.

Before deciding on getting an IVA, be sure to first acquire free, independent advice, upon selecting an IVA.

Get voluntary sequestration help from Credit Matters. Contact us today at 086 111 6197.