As a creditor or a person who is able to lend money to other people, you already know that, by doing so yes, you might be increasing your revenue when you receive the money back but there is also the possibility of losing your money.
A Risky Business
Lending people money can be quite risky. Therefore, creditors are supposed to make sure that, they are going to be completely safe of any kind of mistreatment from the other party. This is why a legal document is necessary in these cases.
The IVA is the kind of document that creditors will definitely will want to consider when it comes to lending money to other people. The most important reason as to why that is is because of the fact that, with such a legal document, creditors can ensure that they will get their money back.
Ensuring Your Money With Documents
These documents will basically give the people owing the money, the opportunity to expand their debt for all the way up to 60 months and pay a specific sum of money every single month in order for them to be able to pay their debt.
Now, if as a creditor you do not require your money back within only a few months after you give them away, you can actually create small legal documents like that that your clients. That way, you will be able to get your money back guaranteed and you will still be giving people the opportunity to repay you at a pace that will be comfortable for them.
Legal Documents Are Necessary
A lot of lenders, whether we are talking about individuals, companies or even public sectors and offices, do tend to go towards an IVA, for more than one reasons. However, there are a few pitfalls and you will want to watch out for them.
You need to understand that as a creditor you’re not going to be allowed to change the rules of the agreement once it has been signed. That means that, if the person owing the money is not able to hold up to their part of the deal and there is no legal term obligating them to pay the money back, you are simply going to be using the money.
Just like it is with pretty much any other kind of contract, make sure that you’re going to watch out for the small letters. Don’t sign anything as long as you know that it is going to be profitable for your business.
