Bankruptcy has a stigma attached to it that could severely impact on or even ruin some careers. It's no wonder then that so many debtors would prefer to opt for an IVA. An IVA is a highly attractive alternative to those people where bankruptcy could be detrimental (such as lawyers or financial practitioners).  Not only does an IVA help those people in severe debt avoid the damaging negativity associated with bankruptcy, it also helps them avoid its severe penalties.

IVA – How it works

But to obtain an IVA, the creditors representing over two-thirds of the debt need to agree to the deal. An IVA is in essence then, a haggle. The person in debt will approach an insolvency practitioner or debt management specialist who will haggle with the creditors. If accepted, the IVA will consist of a percentage of the debt that will be paid off over a given period.

IVA – Can you afford it?

IVA repayments are calculating by examining the income and outgoings of the person in debt. It's important the debtor can afford to meet the agreed payments, or the creditor could still force them into bankruptcy if he doesn't keep up the payments.
The number of people opting for an IVA is on the increase, mainly because more people are becoming more aware about debt management. Debt has become a pandemic in the UK and combined with the current economic climate that's still jittery from the global credit crunch, it's expected that more people will end up investigating an IVA as a viable debt management strategy.

IVA -an undersubscribed financial product

However, only small fractions of the number of people who become bankrupt enter an IVA. This could be because some people simply don't seek professional financial advice or know what financial products are available to them. Without asking for advice, they may simply never know that an IVA is a viable option for them. Some financial experts also believe that the IVA has had a bad reputation, it's important that if you are seeking out an IVA you go through a recognised and reputable financial company - IVAs have to some extent been unfairly tarnished by a small handful of unscrupulous companies who took a high fee to set up an IVA arrangement that was totally unrealistic. Reputable insolvency practitioners don't charge for initial advice or agree to an IVA that is not achievable or realistic. 

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.