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What is IVA?
Individual Voluntary Arrangement (IVA) is a legal and government approved method of resolving debt that would avoids the consequences of bankruptcy. If you owe over HK$100,000 to three or more your creditors and can't afford to meet the repayments then you may be eligible for an IVA. If accepted, up to 100% of your original financial burden could be replaced by an arrangement that you could afford comfortably without disturbing your personal life beyond your control. Creditors often find this appealing because they are likely to recuperate more of your debt through an IVA than they would if you were to declare bankruptcy instead.
The whole IVA process will be negotiated through an IVA advisor who will guide you through every step of the preparing proposal process and application process and support you with financial guidance throughout the length of your IVA
A repayment proposal, having recognized by the court as practicable and implementable, will be put before to each of the creditors who will then vote to accept or decline the IVA.
If creditors representing at least 75% of your debt vote to accept your IVA, then the remaining creditors are legally bound to comply with those terms.
The repayment plan for an IVA usually ranges from 3 to 7 years but typically in five years. During such period of time you may propose to waive any interest on your debts, and monthly repayments are calculated to be manageable and realistic. IVAs are also reviewed and, in certain circumstances, can be amended to suit your specific needs. Under the terms of the agreement you will undertake to contribute as much as possible, but within your budget.
Perhaps the greatest advantage to an IVA is that, unlike bankruptcy, you can still hold control of your home. An IVA proposal could suggest excluding your property altogether, or offer income-based contributions for a longer period instead of the debtor's equitable interest in the property.
Another advantage of an IVA is that it is a completely private agreement between you and your creditors. You may not be required to inform your employer, e.g. like in a case of bankruptcy, as per the employment policy of your employer. Bankruptcy information is advertised in local newspapers and Gazette while an IVA is not.
An IVA is not a quick fix but a long-term solution that allow you to resolve financial chaos with peace of mind in few years.
Although an IVA will put a strain on your credit and thus your borrowing potential, it does not prevent you from getting a mortgage for a property after the completion of IVA.
Address: Room 605-607, China Merchants Building, 152-155 Connaught Road Central (303-307 Des Voeux Road Central), Sheung Wan, Hong Kong