Individual Voluntary Arrangement Debt Management
For thousands of people debt is a very real problem, the current economy in the state that is at the moment means that our monthly or weekly pay just isn`t spreading as far as it used to leaving many of us using credit cards and loans just to get by. Living this way can easily get out of control and leave you with untold money problems.
An Individual Voluntary Arrangement (IVA) can help to overcome your debts by dealing with all your outstanding creditors with one monthly payment. If you have debts that amount to over £15,000 then an IVA could be a perfect solution to your problems. Seek out an Individual Voluntary Arrangement debt management company for advice.
How an IVA works
The way in which an IVA works is to place all of your debts in to one smaller monthly payment which is then offered to your creditors. Individual Voluntary Arrangement debt management companies can help through every step. To qualify for an IVA you will need to have debts adding up to more than £15,000 and to at least three different creditors. You will need to show prove of a regular income and have £200 available for repayments. Licensed professional advisors will work with you to fill out a monthly income and expenditure form, from this they will work out a suitable monthly repayment to offer to your creditors over a period of (usually) five years. An application from your debt management representative is then made to your creditors, three quarters (75%) of them must agree to the arrangement for it to get the go ahead, creditors tend to agree as an IVA guarantees them some form of repayment.
Positives of an IVA
If you meet all the criteria to qualify for an Individual Voluntary Arrangement debt management plan, there are numerous positives; your debt management company can help talk you through them:
- IVA`s are legally binding contracts which must be adhered to by your creditors, this means an end to a barrage of phone calls and threatening letters.
- Once the term of the IVA has ended, whatever ever unsecured debt still outstanding is instantly written off, potentially saving you thousands of pounds.
- The terms of your IVA mean that you only deal with your Individual Voluntary Arrangement debt management company acting on your behalf and do not need to have any contact with creditors or debt collectors.
Drawbacks
As with many circumstances dealing with debt, Individual Voluntary Arrangements also have a few disadvantages such as:
- An IVA will stay on your credit file for six years. The five years of the arrangement and 12 months after.
- Creditors reserve the right to block any IVA, if the terms don`t suit them
- Once your IVA is in place you must keep up with repayments or risk the threat of a court order from your creditors.
An Individual Voluntary Arrangement debt management plan can set you on the right path to a debt free future.