Protect Savings and Assets While Managing Debt with an IVA
Managing debt can feel overwhelming, but an Individual Voluntary Arrangement (IVA) offers a structured solution that helps you regain financial control while protecting your savings and essential assets. Unlike more drastic measures such as bankruptcy, an IVA allows you to manage debt in a way that balances your obligations to creditors with your financial stability.
In this blog, we will explore how an IVA safeguards your savings and assets while providing a practical path to debt management.
How an IVA Works to Protect Your Assets
An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors, facilitated by a licensed Insolvency Practitioner. It allows you to repay a portion of your debt over a set period, typically five years, with the remaining debt written off upon successful completion.
Unlike bankruptcy, an IVA offers protection for critical assets like your home, car, and savings under certain conditions:
- Home Protection: In most cases, an IVA ensures that your primary residence is safeguarded. You may need to release equity if possible, but forced property sales are typically avoided.
- Savings Security: Your existing savings are usually protected, as long as they are disclosed during the IVA process and not excessive compared to your financial situation.
- Controlled Repayments: Monthly repayments are tailored to your affordability, ensuring that you can maintain essential living costs while adhering to the agreement.
Key Steps to Protect Savings and Assets During an IVA
- Engage a Licensed Insolvency Practitioner
Your Insolvency Practitioner plays a crucial role in setting up and managing your IVA. They assess your financial situation and negotiate with creditors to secure terms that protect your assets and ensure manageable repayments. - Accurate Disclosure of Assets
It’s vital to provide a full and honest disclosure of your assets, income, and savings during the IVA application process. Concealing assets can result in the failure of the arrangement and legal consequences. - Plan for Essential Expenses
Your IVA budget will account for necessary expenses, ensuring that you have enough resources to maintain a stable lifestyle without risking your savings. - Avoid New Debts
While under an IVA, avoid accumulating new debts, as this could jeopardize the agreement and impact your ability to protect your assets. - Understand Your Rights
Consulting with your Insolvency Practitioner will help you understand your rights, ensuring that creditors comply with the terms of the IVA and do not unlawfully target your assets.Benefits of Choosing an IVA Over Bankruptcy
- Asset Protection: Unlike bankruptcy, where assets may be sold to pay creditors, an IVA prioritizes preserving essential assets.
- Privacy: Bankruptcy is a matter of public record, whereas an IVA is a private agreement between you and your creditors.
- Financial Control: With an IVA, you retain more control over your finances, allowing you to rebuild your financial future at your own pace.
Who Can Benefit from an IVA?
An IVA is suitable for many UK citizens facing financial challenges, including those who:
- Have a regular income but struggle to manage debt repayments.
- Own significant assets they wish to protect, such as a home or savings.
- Seek an alternative to bankruptcy with manageable repayment terms.
Ready to Take the Next Step?
If you’re considering an Individual Voluntary Arrangement (IVA) to manage debt while protecting your savings and assets, our team at Apply for IVA can help. Our experienced Insolvency Practitioners are here to guide you through the process and tailor a solution that fits your financial needs.
Contact us today to start your journey to financial freedom
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