IVA Solution To Your Debt Problems
In the UK every year tens of thousands of people consider themselves to be in enough serious debt to go the route of an IVA, that is an Individual Voluntary Arrangement. This is a legal agreement set up between you and your creditors, that is the companies that you are in debt to and owe money.
There are a couple of roads you can go down when it comes to serious debt problems, the first is bankruptcy for which many people have heard of and the second is an individual voluntary arrangement which is less well know.
The first option of being declared bankrupt or also known as being insolvent is where a trustee is appointed to manage your case. Any assets you have will be sold off to pay for the bankruptcy costs and any remainder used to clear your debts. You will also usually be forced to make payments towards you debts from any ongoing income you have, say from your current employment. Bankruptcy does not clear all your debts and you will still have to pay them off.
The second option is an individual voluntary arrangement which is an agreement between you and you creditors to clear your debts. It is a private and legal agreement where you will make reasonable repayments to clear your debts over a set period which is usually 5 years or 60 monthly payments.
After the 5 years all your unsecured debts will be cleared even though you may well have not repaid the full amount of debt. You will however have to repay the monthly payments you agreed to in your IVA. You will not lose your personal possessions, household contents or if you own a house that will still be secure. You may however have to use any equity from the house to go towards repaying your creditors. This is done via a re-mortgage on your house to free up the equity.
Whilst you are in the IVA period the people you owe money to will not be allowed to contact you either by post or phone to ask for money. During this time any charges or interest will be frozen so your debt will not increase in size. This is often a great weight off peoples shoulders as it can be that the interest charges alone on many debts are unmanageable.
Whilst neither bankruptcy or an IVA are a pleasant or easy option out of debt it does give you a light at the end of the tunnel. The burden of debt can cause marital problems and ill health and so freeing you from the burden of debt can help get your life back on track. IVA’s are a solution to debt that will help you get control back and let you concentrate on living your life
Caroline South
http://www.articlesbase.com/finance-articles/iva-solution-to-your-debt-problems-527537.html
4 Comments to “IVA Solution To Your Debt Problems”
How many of you have used “Credit Solutions” for your debt problems? do they really work or are they a scam?
If you need credit counseling check this site: http://www.nfcc.org/ . They are a legit non-profit company and offer free credit counseling. They also have debt management program available, if you qualify, at no fee.
They can look at your specific situation and advise you how to proceed.
Most companies you see advertising debt relief/counseling are scams. They take their fees up front and trash your credit. Their favorite negotitation tool is to not pay for several months and threaten bankrutpcy. A lot of credit card companies are not falling for this and just sue you.
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All credit agencies/credit counsellors do is arrange payments for you. I wish everyone would get it — whether you pay them to pay your creditors or you pay them yourself–what is the difference??? Oh yeah when you place it with them often you cannot get anymore credit and you get an R6 or lower credit rating for 7 years…if you can pay them all a little bit on your own do that–avoid them at all costs if you can…
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Please note that if you do use the service of a Credit Counselling way out…your credit history will be damaged period!!!
Proposals that are prepared to your Creditors are not always accepted although people have the misconception that they are the actual Creditor has the right to deny. More so then not they do deny.
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I am a Debt Collector for 24 years