IVA: Proof of Being Credit Worthy

IVA or Individual Voluntary Arrangements help debtors make sure that they meet certain payment agreements with the ultimate goal of erasing a seemingly unmanageable loan or debt problem.

So how does an Individual Voluntary Arrangement work? The preliminary phase is to have an Insolvency Practitioner assess your current financial position. This is usually coordinated through an interview to evaluate your debtor's assets: housing and properties, business, employment, source of income, and bank accounts. Your debtor's liabilities or outstanding loans and mortgages are also assessed. The balance sheets, the positive and negative figures, are prepared and analysed with the resulting assessment showing what you can afford to put under the Individual Voluntary Arrangement or IVA. This process usually also shows how you ended up with your bad debt issues - there's no stone left unturned!

At the time when an IVA is in effect, the debtor must pay the agreed monthly amounts to be settled, to a representative or IVA supervisor. This person, aside from collecting payments is also in-charge of submitting an annual report for everyone involved.

Licensed insolvency practioners and representatives all issue clients with a completion letter and a certificate that will show that the debtor has taken action in accordance with the Voluntary Arrangement. This is useful for the debtor as it serves as proof to other creditors that he or she is still credit-worthy. That said, remember that debtors are not allowed to be given additional credit while under the IVA because normally, they work under a very tight budget. First thing's first, settle the agreed IVA payment schedules, only then can one person under the IVA get the chance to apply for credit and credit extensions. It is imperative that all debts covered by the IVA be tagged as completed so ensure your files are fully updated and correct. Completion letters should go through the IVA Supervisor first. Only then will credit agencies consider your case. All the creditors will be sent a copy of your letter of proposal to check whether they will be willing to extend credit.

If you are wondering if there is still a probability of getting credit extension again while under the IVA, the simple, straightforward solution is to review your file. Helpful booklets can be requested from local trading standards which will explain all the entries found in the booklet. Perhaps the easiest way to understand more and take action is to talk to a specialist debt management solutions company about your options and how to progress with an IVA if appropriate.