An IVA usually lasts for 5 years, during which time monthly repayments are made to creditors through an Insolvency Practitioner, but sometimes it is possible to propose an IVA that consists of just one lump sum payment.
This IVA is referred to as a Lump Sum IVA.
To offer a Lump Sums IVA the debtor must qualify for an IVA under the normal criteria.
The debtor must have
-Little or no disposable income to make monthly payments
-Equity from a property, or have a third party that is prepared to introduce a sufficiently high lump sum
NOTE: The lump sum should be at least 25% of the total debts.
The process for a lump sum IVA is similar to the five year IVA. A meeting will be organised between the insolvency practitioner and the debtor to establish the debtor’s circumstances. The insolvency practitioner will need verification of certain things and will request substantiating documentation. The IVA proposal will then be drafted and forwarded to the debtor for signature. Once the signed proposal is received by the insolvency practitioner, it will be forwarded to all the creditors for their consideration.
Once the IVA has been accepted by the debtor’s creditors, both the debtor and the creditors will be bound by the terms of the arrangement until the arrangement is completed, which means that the creditors can no longer pursue the debtor for the debt. If the lump sum is paying off a percentage of the overall debts, then once the IVA is completed, the remainder of the debt will be legally written off and the debtor will be debt free.
An IVA is an alterative to bankruptcy and creditors will very often receive a much higher return in an IVA than bankruptcy. Fees for a lump sum IVA are generally less than five year arrangements as they usually only last for a year or so. All IVA fees are agreed by creditors.
For more information on IVAs you can visit iva.net, fill in the form below or give McCambridge Duffy a call.
Apply for a Lump Sum IVA today
Call now on 0800 043 3328 and tell the advisor you are interested in applying for a "lump sum IVA".
Can we help with your debt problems?
To find out if McCambridge Duffy can help you regain control over your finances before matters are taken out of your hands, or to find out if you qualify for an IVA, simply get in touch:
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