IVA is a means by which people in serious debt problems avoid their bankruptcy. You can go to an authorized and professional organization and ask for IVA. They will appoint an Insolvency professional to study all of your financial issues including your debts and frame a repayment agreement that is to be proposed to your creditors. Once the agreement is approved, neither debtor nor creditor can make any changes in the terms and interest rate.
An IVA is available to all individuals, sole traders or partners; who are really in deep financial problems. Also by IVA you can save you property which in case of bankruptcy will be divided among your creditors.
Some other facts:
IVA is also used as a means of survival by sole traders and partners as they currently are not in a position to repay their debts but thinks that in future they will have more profit. IVA has the following benefits to the sole traders or partners:
a) It enables them to continue their business and generate income which would otherwise be stopped.
b) Theoretically they have no credit problem, although they may face some in practical.
c) The IVA proposal is completely made seeing the needs and repayment capacity of the debtor, so they can easily fulfill their daily requirements.
d) Like bankruptcy, IVA doesn't impose any restriction on debtors such as not being a director of a private limited company.
Some other benefits of an IVA are as follows:
a) You will have a financial security as now your creditors can't take any legal action towards you.
b) IVA has a life span of 5 years.
c) IVA freezes all bank interests and charges.
d) The interest rate of the agreement can't be changed and thus you have no worry of increasing interest rate.
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