Sunday, December 2, 2012

How an IVA Can Help With Debt Problems

Wipe our Debt
Wipe our Debt (Photo credit: Images_of_Money)
An IVA is a scheme that allows you to clear unsecured debts which you can no longer afford to repay. It doesn't apply to secured loan or any hire purchase loans, which can often be lessened by returning the original asset. 

An IVA helps you to find your way out of your problem debts by allowing you to repay a single affordable amount each month, with an agreement that after a fixed period of time, which is usually 60 months / five years, any remaining debts will then be written off. 

No matter who you’re in debt with, finding the right debt solution for you means you may never need to communicate with your creditors directly. It can be done for you and look to negotiate repayments based on your affordability, depending on which debt solution you choose. This removes the hassle of having to do this with multiple creditors.

The scheme was created by the Insolvency Act of 1986, which was designed to help both people and businesses avoid the threat of bankruptcy when their debts become unmanageable. The IVA scheme has been used by thousands of people in recent years, who have successfully used them to deal with their mounting and problem debts and become free from debt at the end of the five year period. 

How is an IVA managed? 

An IVA expert will manage the process for you. Insolvency practitioners (such as those found here: will deal with all of your creditors and negotiate a deal. When the IVA plan is in place, you won't be hassled by your creditors anymore, which can be a real relief to those who have struggled with demand letters and phone calls. Instead, you repay a fixed sum via your insolvency practitioner each month and it's an amount that you can afford. The IVA practitioner deals with the paperwork and your creditors, which takes the administration away from you.

Other benefits of the IVA scheme 

As well as making sure that your unsecured debts are fully cleared and written off in five years, the IVA scheme is designed to protect you from legal action and also prevent you from needing to become bankrupt. It also protects your assets, which means that you won't have to sell your home, which can be the case with bankruptcy. The IVA is a legal agreement, which means that your creditors have to act by its terms as do you. The IVA will pick up all of your different unsecured debts, even if a number of your creditors don't agree with the terms of the proposal. Only 75% of them have to agree with the proposed repayment scheme and the IVA practitioner, who is managing your IVA arrangements, will organise this for you. 

Is the scheme for me? 

It's vital to get IVA help advice before entering into any financial arrangement, as the IVA scheme isn't suitable for everyone and circumstances must be discussed on an individual basis before making a decision whether to enter into the scheme. 

For example, you must be able to commit to meeting the agreed and affordable monthly payment, every month for five years, or the scheme will fail and bankruptcy will generally be the final stage. A debt advisor can look at your individual circumstances and provide you with advice that is right for you and work together to find a solution. There is always a way out of debt, be it via the IVA scheme or another route such as bankruptcy. The first step is to speak to the experts and find out which solutions are available to you. Don't delay - take the first step to dealing with your debt worries and get your life back on track. 

Written by Jamie for more info see Iva help & advice.

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