Single - Homeowner - Lump Sum IVA
This type of IVA is for people who are struggling to maintain their unsecured debt repayments and want to deal with their debt problem without involving anyone else.
The debts themselves do not have to be in a single name, in fact, it is quite common for a person to enter into an IVA when some of their debts are in joint names with someone else. The IVA deals with the personal liability associated with the debts on behalf of the applicant but, unfortunately, does not deal with the other party's liability. They would need to approach the creditor to resolve how they were going to deal with their liability for themselves.
The suitability of this type of IVA would normally favour people who cannot afford to make any ongoing monthly payments. Indeed, it is mainly due to a lack of affordability that creditors will seriously consider the option of a Lump Sum IVA.
People entering into this type of IVA will be Homeowners, or at least own a share in a property and their IVA will consist of a single 'Lump Sum' payment, which creditors accept as a full and final settlement of all the debts in the IVA.
The size of the Lump Sum is very important.
The sum will need to be large enough in value to provide a sufficiently high return to creditors, so as to compare favourably with the return creditors could expect if they took bankruptcy action against the IVA applicant.
Where the funds come from is also key.
It is most preferable for the Lump Sum to be provided by a 3rd party, say a family member, a friend or someone who is completely unassociated with the debts in the IVA. This is because creditors will see they are benefiting from funds that would not be available in bankruptcy. However, other avenues can work just as well if the funds can be generated by the applicant themselves, such as voluntarily selling an asset, surrendering a long-term savings plan, selling shares or even taking a secured loan.
But in the end, it will be the reasonableness of the offer that will determine the chances of success and it is always a good idea to discuss this element of your IVA with your consultant, just to ensure there are no related issues.
One significant advantage for this type of IVA over the fixed term option is that once the IVA has been accepted by creditors and the IVA has completed successfully, the creditors forfeit any claim to any equity the applicant my have or develop in the future. Instead they are legally obliged to write-off any balances leftover by the IVA.
Summary:
This type of IVA provides a Homeowner the opportunity to enter into an IVA which consist of just one 'Lump Sum' payment, made as a full and final settlement of all their unsecured debts. It also provides a legally binding agreement for the applicant, to ensure that creditors are legally obliged to write-off any outstanding balances that were left unpaid by the lump sum introduced into the IVA and accepted by the creditors.
To discuss this type of IVA in more detail with one of our IVA consultants simply call 0800 856 8569
If you simply want to have a chat about your options, or would like to ask a question about your solution. We invite you to call us at a time that suits you on.
We invite you to request a confidential consultation by simply submitting your details in the form provided, with a preferred time for us to call you back.
If this type of IVA is not what you were look for, answer the 3 simple questions below to find the type of IVA that would suit you.
An IVA can help a single person or two people sharing joint living costs deal with their debts.
Which type would be suitable for you?
