Can Individual Voluntary Agreements Cause Bankruptcy?
"Individual Voluntary Agreements are a government-sponsored program that enables a person to receive a clean financial bill of health if he repays his creditors over a specified period of time, as stipulated in a formal agreement finalized with his creditors. Individuals, sole proprietors, or business partners in a transient financial crisis who are unable to pay their debts should consider this option. However, they anticipate that their situation will improve over time and do not wish to forfeit their property if declared bankrupt.Individual Voluntary Agreements can assist a debtor in paying off his debts over a period of five years and avoiding bankruptcy if he is able to continue making payments to his creditors. However, if he is unable to make payments to his creditors as stipulated in the IVA, he should contact the insolvency practitioner who helped draft the agreement and negotiated with the creditors in the first place. The practitioner can then attempt to renegotiate with the debtor's creditors and convince them to accept smaller payments over a longer period.However, if the debtor is unable to honor Individual Voluntary Agreements even after negotiating lesser payments, he has the option of filing for bankruptcy. The debtor must notify the insolvency practitioner of his inability to pay and then ask him to formally terminate the contract. After this is accomplished, the debtor's assets will be used to satisfy the amount owed to creditors.Individual Voluntary Agreements that fail could result in the loss of family homes for debtors who own property, as the Insolvency Practitioner is required by law to disclose any assets that the debtor owns in whole or in part so that these can be used to settle the debts of the creditors.
" - https://www.affordablecebu.com/
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"Can Individual Voluntary Agreements Cause Bankruptcy?"
was written by Mary
under the Finance / Wealth
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comments. The article was created on 01 June 2023
and updated on 01 June 2023