How Does The I-V-A Process Work?

Sticky Post Posted on 26 of August, 2015 by in I-V-A Process

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You have finally decided to opt for an I-V-A or an Individual Voluntary Arrangement. However, you already have creditors or lenders waiting impatiently for their money. You are wondering how the I-V-A process works and just how soon you will be clear of your debt.

The I-V-A Process

The I-V-A process consists of six steps and it usually takes about six weeks to complete. Other factors may also lengthen or shorten the IVA process and we recommend you follow the instructions given by your insolvency expert. Nonetheless, here is a quick step-by-step guide to what you can expect when you apply for an I-V-A

Step # 1 — Talk to an insolvency expert

An insolvency expert is the first person you have to consult. An insolvency expert will assess your personal financial situation and evaluate whether you are eligible for the I-V-A. The adviser will assess your income, monthly expenses, debts, assets, secured loans, and other factors. The adviser will also discuss your options with you and let you know about other options like declaring a bankruptcy, the pros and cons of each option, your outstanding loan amounts, etc.

Step # 2 — Eligible for an I-V-A

Once the expert decides that you are eligible for an IVA, he will then draft a Statement of Affairs. The SOA is a consolidated document that contains detailed information about your current financial condition, your outstanding loans, and any income that you have at present. This document also serves as a plan for your insolvency agreement. As the SOA contains your income and your loans, it helps the lenders and the insolvency expert plan a repayment process and repayment amount that you can afford. The insolvency expert will act as the nominee or the person controlling the agreement and negotiating with the creditors. At this stage, your nominee or the insolvency practitioner may also apply for an interim order, which will stop any legal proceedings and recovery procedures that are being set up by creditors. This interim order will prevent creditors from contacting you until your IVA is settled or cancelled.

Step # 3 — Agreeing on the terms

Creditors have to agree to the terms set forward in the I-V-A agreement as per the insolvency art 1986. The SOA is usually circulated at the local County Court and the Insolvency Service. This will notify lenders that you are going for an IVA process and they will contact your nominee. The SOA will usually contain a date for a formal meeting with the lenders and this meeting is called the Meeting of Creditors. At this meeting, modifications to the repayment process, repayment period, and repayment amount may be requested by the creditors. In some cases, the lenders may contact the nominee before the meeting to negotiate terms. Lenders may also ask for a later meeting so that they can collect data.

Step # 4 — Signing the I-V-A

Once the IVA proposal has been set forward, creditors will come forward to negotiate their terms. A meeting may be set up with you, your creditors, and your insolvency expert. You should know that once the I-V-A is signed, all creditors have to abide by the clauses of the agreement. This includes creditors who have signed the agreement, who have not signed the agreement and those who did not attend the meeting.

Step # 5 – Notification

Once the agreement is set up, all parties are informed of the I-V-A and a Supervisor is appointed to ensure that you follow the terms of the agreement.

Step # 6 — Terms

As long as you follow the terms of the settlement, the I-V-A will remain in force. However, in case you default again; creditors have the option to approach the courts and recover their dues. You may have to file for bankruptcy as well.

Although these few steps cover everything involved in the IVA process, we do recommend you contact a financial expert as soon as possible. Creditors are willing to work with borrowers to simplify the lending process. If you cannot pay off your loans, get in touch with an expert and set up an IVA as soon as possible. It is your best option for getting out of debt quickly.

Facts about Scottish trust deeds

Sticky Post Posted on 25 of August, 2015 by in Scottish trust deeds

If you are deep in debt, there are a few viable options to help you in redeeming yourself. This may be in the form of a trust deed or an Individual Voluntary Arrangement. First, you need to consult with a financial or debt expert in order to get the viable debt help to clear your debts. A Scottish trust deed is an arrangement between unsecured creditors and the debtor. It involves a detailed plan on how the debtor will pay off a proportion or all the debts owed to the creditors. It is a recognised formal repayment plan. Individual voluntary arrangement and a Scottish deed can both be used by an insolvent individual to redeem themselves financially.

The Merits of using a deed

You are given a period usually not exceeding five years to pay a portion of the debts you owe to the creditors. This gives you the chance to make appropriate financial arrangements to service your loans properly. During this time, your creditors do not have any right to sue you or take over your assets as repayment. You will therefore not lose your assets unless you are willing to sell them in order to offset the outstanding balance. Most people are afraid of losing their homes and you can be guaranteed that if it is not included in the arrangement then you home is secure.

Since the deeds are no longer advertised, you will not experience any form of stigma. The deed is an agreement between you and your creditors and no one else outside this scope will find out about your status unless you want to disclose the information to them. The arrangement is in such a way that you are comfortable making the payments. It is therefore based on your abilities to pay. The deal is administered by an insolvency practitioner who can also offer you free advice on how to get back on a successful financial track.

When the period in question elapses, you are a debt free person since all the outstanding balance is written off. Since you do not deal with the creditors directly, you will have Peace of mind.  There will be no calls pressuring you to pay up your debts quickly and the creditors will not camp on your premises for this purpose either. At the end of the period, you have regained control of your finances and know better than to accumulate huge debts anymore.

Demerits

The agreement allows the insolvency practitioner to scrutinise every transaction that comes your way. This may be in the form of revenue or expenditure items. Therefore, your life and that of your family will be under close scrutiny on a daily basis. This has an effect on your family and especially your partner. Your bank accounts will also be closely monitored mainly to ensure you do not accumulate additional debt as you continue servicing your current debts. You are allowed to take loans as long as they do not exceed £500.

This arrangement has an effect on your credit rating. This means that after the agreed upon period, you credit rating will be very poor. However, this improves with time as long as you act in a way that will redeem your credit worthiness. Some organisations do not allow their employees or members to participate in such an agreement. Therefore, you will either choose another method or you will lose your membership/ job. The proposal you present to your creditors may be rejected. This means that you have to come up with a better proposal or another way of paying up your debts.

If you hold a position as a director in any firm or you are a partner in a firm, your insolvency terminates the position or the partnership. If this is your only source of income, you need to rethink your options before you settle down on deeds or IVAs. If it is not registered, the deed may not protect you from those creditors who did not agree to your proposal. You may therefore face demands for prompt payment of their debts or face legal action.

Secured debts

All your secured debts are not affected by the agreement you enter into with your unsecured creditors. This includes your mortgage. You may still continue servicing your current mortgage but if you are having any trouble keeping up with the payments, you may renegotiate with the mortgagor for a more suitable deal.

 

1st And 2nd Mortgage Refinance Loan – Consolidate 1st And 2nd Mortgages Into One Low Payment

Refinancing both your first and second mortgages will result in one low monthly payment that could save you thousands in interest charges. By combining both mortgages, you qualify for lower rates than if you refinance separately. You can see a significant savings with your second mortgage refinance, which is often several points higher than your first mortgage rates. You will also save on application fees and other closing costs.

Strategies To Lower Your Mortgage Payment

You have a couple of options to lower your mortgage payment when refinancing. The first choice is to find a low rate mortgage. So even if you choose the same length for your loan, you will still see a savings in your monthly mortgage bill. Adjustable rate and interest only loans will give you the lowest payments, at least at the beginning of your home loan. But a fixed rate loan can also give you reasonable rates with security that they won’t rise in the future.

The other option is to extend your loan term, especially in the case of your second mortgage which usually is for five to ten years. By consolidating your loans to a thirty year loan, you lengthen your payment schedule for principal, so you have a smaller payment. However, your interest rate and charges will be higher than with a shorter term.

Getting The Best Loan

Once you determine the type of loan and terms you want, do your shopping for a good lender to save even more money. Lenders will vary in how much they charge for closing costs and interest rates. The APR will tell you how loans compare overall, both in terms of rates and closing costs.

But if you are planning to move or refinance again in the future, then be wary of paying high closing costs. Even if they secure you a lower rate, you will only see a savings if you keep the mortgage for several years.

Don’t base your lender decision based on posted loan rates. Ask for a personalized loan quote based on your general information. With more accurate numbers, you can make an informed choice as to who has the best financing for you.