It’s an interesting question, and one that will be asked by many people over the coming months. If you have over-used the plastic, and you would like to know if an IVA is the best solution to deal with your debt problems, then there are certain things that you need to consider.
Credit card debt is one of the biggest problems, facing hundreds of thousands of people in the UK. When the economy was booming, many individuals were running up large balances on their cards, in the knowledge that they could afford the repayments. This problem was exacerbated by the banks, which were only too keen to issue multiple credit cards to the same user. These pre-approved application forms were usually accompanied by images of new cars, caravans, holidays and flat screen TVs, in order to tempt us to splash the cash.
Now that we are in the middle of the worst financial crisis for decades, many people have been caught short, and can no longer afford the monthly repayments on their cards and loans. These individuals are in need of a solution, and are calling help organisations, for IVA advice, in record numbers.
An IVA is a form of insolvency and is designed for consumers that cannot afford to repay their debts, as an alternative to bankruptcy. The arrangement must be nominated by a licensed Insolvency Practitioner, and once the arrangement has been accepted by the creditors, the IP must also supervise it for its duration. Unsecured debts can be included on an IVA, and they are gathered together and consolidated into a single monthly payment. The length of the arrangement is fixed at the beginning, with 5 years being the typical term. At the end of the arrangement, any unpaid debt can be written off. If you are a home-owner, then you may be required to remortgage at some point during the arrangement, in order to help clear the debt.
Since everybody’s personal circumstances are different, no two IVAs are the same. It is imperative that you seek advice from a qualified professional before you take any action. If you would like to know if an IVA is the right thing for you, speak to a licensed Insolvency Practitioner.
