What is an iva ? An IVA is one kind of debt solution that enables you to “freeze” your debt & agree to repay them back over a certain period of time. And any money you owe thereafter this period is written off. An IVA settlement is a legally binding agreement plan between you & your unsecured lenders, conducted & supervised by a professional licensed Insolvency Practitioner (IP). Henceforth, in short, you agree to repay the maximum amount you can afford over a certain period of time, generally five or six years, & at the end of which period your lender agrees to write off any outstanding balances.
Professional financial advisors work with you to calculate the maximum payment you’re able to make & even assess whether you’ve anything else you’re able to provide to your lenders to increase the settlement plan e.g. from the sale of a property, savings, or assets.
What is an iva uk and how does it work ?
There are a number of agencies available that offer you a professional IP who will guide you on the terms of à agreement in order to maximize the possibilities of acceptance by your lenders & will help you in arranging the legal document. They may charge you for advice regarding an Individual Voluntary Arrangement or for iva debt help. Well, if you are already in a DMP, it’ll continue as normal unless your Individual Voluntary Arrangement has been approved.
Your IVA firm can charge a monthly fee for the work both for getting the settlement plan approved by your lender & for managing it, however, these changes are agreed by your creditors and are taken out of the payments made by you once the arrangement has been approved, so you don’t pay anything additional for covering the fees.
Keep reading to know more about “what is an iva and how does it work”!
Is an IVA the perfect option for you?
An individual voluntary arrangement is a form of insolvency & is a legally binding settlement agreement, so, it’s pretty essential that you consider whether:
- You can commit to making a monthly payment for the next five to six years
- You might be able to fix all your finance-oriented issues without the requirement for a formal settlement arrangement for instance if you’re expecting a pay rise or can sell a property to pay off all your debts
- You’re willing to be honest & open with your lenders about everything that you owe & all of the properties and assets that you’ve.
- You’re willing to render the Insolvency Practitioner with documents of your wage slips or other document copy of income every year. Well, a review of monthly earning & expenditure is generally needed in terms of the agreement
- You’re in a financial problem & can’t make the regular payments to your lender.
Benefits of using IVA settlement plan:
- You can pay an amount that you can easily afford over a certain period of time, generally five to six years
- The outstanding amount of your debts will be written off at the end of the IVA settlement plan!
- Your lenders can not pursue you for the debts when the IVA settlement plan is approved, & they can not apply additional charges & interest.
- And, if you’re a homeowner, then you can stay at your house however you might need to make extra payments to the arrangement
Drawbacks of an IVA Settlement Plan:
- Due to certain circumstances, if you fail to stick to your side of the settlement agreement, it can fail & you might owe as much as you did the very first time!
- The IVA settlement plan will show on the Insolvency Register
- If your IVA settlement plan fails, your lender or your IP can apply to make you bankrupt
- There will be certain limitations on your spending whilst you’re in an IVA settlement plan.
- If you’ve a property with equity, you’ll require to try & re-mortgage towards the end of the settlement plan. If you’re not able to do so the Individual Voluntary Arrangement might be extended by 1 year!
- Certain debts like secured loans, mortgages, fines, & taxes, can be incorporated in an IVA settlement plan so you’ll require to keep paying these
- You are not able to borrow more money during this settlement arrangement
- If your financial condition changes, you’ll be expected to pay more to your lender
- The IVA settlement plan will reflect on your credit report for five to six years & pose a major impact on your ability to get credit
- Because of any uncertain situation, if your circumstances worsen & you can not maintain the monthly, your settlement arrangement can fail
- If you get a lump sum money during the period of your IVA settlement arrangement, then you might be required to use that entire money toward your settlement plan!
How Does IVA Technology Work?
The functionality of individual voluntary arrangement solutions can slightly vary depending on where you actually obtain your software. But, the main functionality remains the same.
And when it comes to virtual agents, it uses AI, speech recognition, & integrations with your CRM, & other backend systems for engaging with clients & completing service tasks.
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Utilising a code-free, visual Individual Voluntary Arrangement development interface, you will be able to build virtual agents by dragging & dropping functionality into the interaction flow of your task. On the other hand, people can also begin with pre-built task templates, such as appointment maker, order lookup, credit card payment, & customize it to meet their requirements.
The majority of the cloud-based AI solutions are composed in order to integrate with technology at the heart of business operations. An debt iva advice solution integrated with your contact center can ask a customer what they require help with & then utilise natural language processing in order to respond to open-ended prompts. Well, this technology enables the virtual agent to identify keywords & phrases to move the client along on their purchase or self-service journey.
So, when a virtual agent finishes a task, such as sharing a clients’ balance with them, it can pass all the details through the system for logging & reporting. In case, if a call needs to be taken to the next level & delivered to a human assistant, the virtual agent can share contextual details from the interaction, assuring clients don’t have to repeat themselves.
The Bottom Line
This comes to the end of “This Week’s Top Stories About What Is An Iva UK”. Hopefully, you don’t have any confusion regarding “what is an iva and how does it work”. If you need iva debt help, let us know! We would be happy to serve you!