Lump Sum IVA Process
Posted: Thursday, January 15, 2009
by Gary Foss
IVA stands for Individual Voluntary Arrangement . It is a government-backed scheme that allows people who are incapable of meeting their debt repayment in full to pay back a reduced amount. IVAs are only open to UK inhabitants excluding Scotland. For Scotland see Protected Trust Deeds.
A Lump Sum IVA is a specific type of IVA. The criteria for an Lump Sum IVA is the same as a regular IVA:
You must have three or more creditors to which you own money
You must be able to offer creditors at least 200/month
Sometimes you can settle the amount owed to creditors in an IVA by making a single lump sum payment. In certain circumstances, the creditors may even accept this as the final payment for your IVA, even if this amount is less than the total of your IVA debt. For example, if you don't have the earnings to meet standard payments but you hold a considerable amount of wealth through any of a number of assets then you may be able to make a lump payment to cover the balance of your IVA. There are a variety of ways that you could have come up with the funds: a dead relative's will, releasing equity in your residence, or by raising capital a different way.
In order to qualify for a Lump Sum IVA, you need to meet the same criteria for a typical IVA. This means that you should have debts over 15,000 with more than two creditors. You will also be required to have some sort of asset that you can offer as the lump sum payment.
On some occasions the creditor will agree to less of the debt just so that you will reimburse them back quicker. From their point of view, to lose a small amount is better than losing a larger amount as would be the case if you couldn't make the set monthly payments.
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Top-level comments on this article: (1 total)I live in America where destruction is the name of the game unless you are in business.where you can go belly up and reopen the very next day under a new name. Yes a wonderful system, we get to bail them out and pay it all back. Good article, interesting.
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