An Individual Voluntary Arrangement (IVA) is a debt solution which involves yourself and your creditors coming to a legally binding agreement to extend your loan term and allow you to make reduced monthly repayments over this new timeframe. In order for an IVA to be officially set up, you need to acquire the services of an insolvency practitioner.
Whilst an IVA can be hugely beneficial to you in certain circumstances, they can often be extremely difficult to uphold and there are a number of potential dangers they come along with which need to be taken into consideration.
The following page will outline the affect an IVA will have on you if you are someone who has a lasting power of attorney for another individual.
Lasting power of attorney
The lasting power of attorney is when sovereignty and control of an individual’s affairs are given to someone else. This can include control over the person’s property, bank accounts and assets.
Certain debt solving options involve an individual in debt handing over their lasting power of attorney over their assets and money to a court appointed official, who will then be tasked with managing their financial affairs and finding a viable solution to repaying their creditors.
If you chose to use bankruptcy to address your financial problems, then you would forfeit your lasting power of attorney over your bank accounts and assets to a court official called a trustee, who will then preside over the sale of your most valuable items. This money would then be used to repay your creditors.
Conversely, if you decide to utilise an individual voluntary arrangement to tackle your financial problems, your position as lasting power of attorney will be retained, as this legal debt solution does not obligate that your assets and cash is repossessed and sold off to repay your creditors.
Deciding on an IVA
- How does an IVA work?
- Which debts can I include?
- How much does an IVA cost to set up?
- Income and Asset Requirements
- How an IVA will affect homeowners
- How an IVA will affect your bank accounts and pension
- How an IVA will affect your credit rating
- How an IVA will affect your work, home and assets
- The lasting power of attorney
- Is an IVA the right solution for me?