Individual Voluntary Arrangement (IVA) is a practical way to resolve an individual’s tax debt. With IVA, one can agree to pay taxes and penalties with less money over a certain period. The IRS allows IVAs to last up to five years, and the process is simple. But, first, the individual must gather all of the necessary information and then consult with an experienced tax attorney. If you are thinking of getting an IVA, or are already in one, here is everything you need to know.
Important Facts of Individual Voluntary Arrangement (IVA)
An IVA is legal consent between an individual and his\her creditor, i.e., you and your creditors. It means that if the person doesn’t follow the terms of the agreement, his\her creditors can take legal action against you. An IVA allows you to reduce or even eliminate your debt liability. An IVA can provide lower interest rates and increased flexibility when making payments.
When making an IVA, you must choose the right bankruptcy option and know your rights and responsibilities. Once you have made your decision, there are steps to take to make it happen. This guide will help you through each step, from start to End of an IVA.
What Happens When You Enter an IVA?
When you enter an IVA, you ask the court to help you reorganize your debt. You will propose to your creditors that outlines how you will repay your debt over a set period. If most of your creditors accept your proposal, the court will issue an IVA order. It will protect you from any legal action by your creditors while the IVA is in effect. It also prevents them from contacting you directly or trying to seize any of your assets.
An IVA allows the individual to repay the debts over a longer period, making it more financially manageable. It also gives you some protection from legal action by your creditors.
How Do You Know When It’s Time to End Your IVA?
The procedure of ending an IVA is an important question many people struggling with debt asks themselves. It’s not easy to answer, but there are a few things to consider. Firstly, evaluating the amount of money you still owe is considered. If you have a lot of debt left to pay off, it may be best to continue your IVA. However, if you have paid off most of your debts, it may be time to end the agreement and start fresh. Also, if the individual’s credit score has improved since you started your IVA, it signifies that it’s time for the End of an IVA.
How To End Your IVA?
Ending an IVA early can sometimes help improve your credit score even more. You must consider your overall financial situation.
Ultimately, weighing the potential consequences of ending an IVA early is important before deciding. Speaking with your trustee and providing the necessary documents will help terminate the agreement. After that, you can draw the official payments as scheduled by your trustee is left over. So, your IVA will be officially terminated, and you will not be able to be held responsible for any debts associated therewith.