Individual Voluntary Arrangement Bank Account
Money problems effect thousands of people each year for many different reasons, a member of your household could have been made redundant, your business may not be producing the turnover it once did or maybe a new child has forced you to cut working hours. Whatever your situation debt can is a frightening thing, especially if you have a large amount of money owed to creditors.
What Are IVA For?
An Individual Voluntary Arrangement also known as an IVA can be a great way to get your money troubles back on track; they are also a good alternative to anyone that is considering bankruptcy. An IVA works by a licensed practitioner working with you to come up with an affordable monthly sum to pay back your creditors, by reducing the cost of your current repayments it can save you hundreds of pounds per month. Once you have entered in to an IVA interest rates to creditors are frozen and there are no late payment charges also saving you precious money. It is required that 75% of creditors agree to the IVA proposal for it to go ahead. The company supervising your IVA will deal in full with all your creditors, meaning no need for you to have any contact with them.
How Long?
The terms of an IVA mean that during the duration of the agreement (usually five years) you are not allowed to obtain further credit or add to your debts in any way, doing so will be seen as a hindrance in you making repayments to creditors. An IVA also stays on your credit file for six year making obtaining any sort of credit card or loan a tough task. There are options available when it comes to opening a bank account, if you have and IVA you are still eligible for an individual voluntary arrangement bank account.
Getting an Individual Voluntary Arrangement Bank Account
Anyone with an IVA looking to join a bank should apply for an individual voluntary arrangement bank account also known as a Basic bank account.
If you already hold a bank account, it might be wise to no apply to open an account with the same bank you are already in debt with either through an overdraft of loan. You may also need to change accounts if your bank has frozen your account.
An individual voluntary arrangement bank account comply with the rules of the IVA which forbids any access to credit including overdrafts which are seen as a form of credit. These accounts are known as basic because they have no overdraft or cheque book facilities.
An individual voluntary arrangement bank account still allows you to pay in your wages, tax and pension credits and benefits. You can set up direct debits and standing orders and you also receive a chip and pin card to make payments in stores and withdraw cash from ATM`s and Post Offices.
There are plenty of online brokers that can search through banks that who offer basic bank accounts to those with adverse credit ratings.