Individual Voluntary Arrangement Credit
Many times in our lives we find ourselves falling in to the trap of debt by falling behind on payments on our credit cards and loans. In these times it is quickly becoming harder just to make ends meet, utility bills and general living expenses are constantly on the rise meaning sometimes we just can`t afford to make a repayment to our creditors. Fortunately if you are eligible, you could apply for an Individual Voluntary Arrangement.
Individual Voluntary Arrangements
An Individual Voluntary Arrangement or IVA is an option for anyone with debts amounting to over £15,000 to apply to have the chance to make set repayments to those you had taken out the credit with, in one monthly payment. To be approved for an IVA you must meet certain criteria:
- The amount owed to creditors exceeds £ 15,000 and was taken out with three or more credit card, loan or finance company.
- You can afford a minimum of £200 per month in repayments
- You have a regular monthly or weekly income.
If you are found to qualify, then trained licensed professionals can help you to fill out an income / expenditure form and agree upon a monthly repayment figure you can afford and then offer that figure to your creditors. Three quarters (75%) of your creditors must accept this arrangement for the IVA to be set up on your behalf.
Individual Voluntary Arrangement Credit
Unfortunately the terms of the agreement make it virtually impossible to be able to get any Individual Voluntary Arrangement credit. An IVA is usually set up over a period of five years, during this time it is forbidden that you add to any of your existing debts.
Getting Individual Voluntary Arrangement credit is seen by the creditors to hamper you in making repayments, although in some cases in may be possible.
If you are a business owner or you are self- employed it may be granted that you can have access to Individual Voluntary Arrangement credit. This could be granted if you have business bills to be paid or people who are owed money from you. In these cases it is required that you pay in full every month whatever amount spent.
After the term of the IVA has ended you are free to inquire about taking on credit. An IVA does however stay on your credit file for up to six years; this could make it hard to gain credit as you will be seen as a risk to lenders.
Higher Interest Rates?
There are companies that do offer Individual Voluntary Arrangement credit cards and loans. You must be aware that due to your previous money problems you are likely to be subject to higher than average interest rates. Some short term loan companies and pay day loan companies do not carry out any credit checks making it possible for IVA holders to get hold of credit.
If you do manage to credit then paying back what you have spent, each month in full can steadily improve your credit rating.