Individual voluntary arrangement
Okay kiddo, so imagine you have some toys that you really enjoy playing with, but you are not able to share them with your friends. You really want to keep your toys, but your friends want to play with them too.
This is kind of like when a grown-up has a lot of money, but they can't pay all of their bills and debts on time. They might want to keep their money and still be able to pay off their debts or bills, but they need help to figure out a plan that works for everyone involved.
That's where an Individual Voluntary Arrangement (IVA) comes in. It's like a special plan that a grown-up can make with their creditors (the people or companies they owe money to) to help them pay back what they owe, without having to give everything away.
The grown-up works with a person called an insolvency practitioner, who helps them come up with a plan. They figure out how much the grown-up can afford to pay back and for how long. Then the insolvency practitioner talks to the grown-up's creditors and they agree to the plan, so everyone knows what to expect.
The grown-up then starts to make payments to the insolvency practitioner, who uses that money to pay back the creditors. This way, the grown-up can keep their money and still pay off what they owe.
Does that make sense? It's like making a plan with your friends to share your toys in a fair way, so everyone gets a chance to play with them. But instead of toys, it's money that grown-ups need to pay back what they owe.
This is kind of like when a grown-up has a lot of money, but they can't pay all of their bills and debts on time. They might want to keep their money and still be able to pay off their debts or bills, but they need help to figure out a plan that works for everyone involved.
That's where an Individual Voluntary Arrangement (IVA) comes in. It's like a special plan that a grown-up can make with their creditors (the people or companies they owe money to) to help them pay back what they owe, without having to give everything away.
The grown-up works with a person called an insolvency practitioner, who helps them come up with a plan. They figure out how much the grown-up can afford to pay back and for how long. Then the insolvency practitioner talks to the grown-up's creditors and they agree to the plan, so everyone knows what to expect.
The grown-up then starts to make payments to the insolvency practitioner, who uses that money to pay back the creditors. This way, the grown-up can keep their money and still pay off what they owe.
Does that make sense? It's like making a plan with your friends to share your toys in a fair way, so everyone gets a chance to play with them. But instead of toys, it's money that grown-ups need to pay back what they owe.