If you are struggling to pay your debts you may want to consider an Individual Voluntary Arrangement (IVA) as a way to get your finances under control. IVAs are legal contracts between you and your creditors, and are designed to make your payments more affordable. Typically, the repayments are spread over five or six years. While an IVA will not get rid of your debt entirely, you will be able to write off 60 to 70% of the money you owe.
You should also look into getting a free debt advice service, as they can help you decide if an IVA is right for you. An IVA can be helpful, but you should also be sure to use your savings wisely. For example, opening a savings account can make it easier to save up for a holiday or big purchase, such as a car.
One of the main benefits of an IVA is that your assets are protected from your creditors. This means that your home is safe as long as you continue to make your regular monthly payments. However, if you own an expensive car, you could have to sell it to pay off your debts. Also, keep in mind that a poor credit rating will make it hard to obtain further credit in the future.
Your IP will work with your creditors to devise a plan that will keep you out of debt. They will look at your income and expenditure, and figure out what you can afford to pay. Then, they will create a proposal that your creditors can vote on. Once they’ve approved the proposal, it’s a matter of implementing the arrangement.
The main benefit of an IVA is that it freezes interest rates on your debts. When this happens, it becomes much easier to negotiate your debts and settle them. Having an IVA can also help you avoid a bankruptcy.
A good IVA provider will be able to advise you on the best deals, and will not have access to your bank accounts. This will also allow you to protect yourself from any unwanted “offsets” that your bank might be able to take.
In addition to the usual suspects like your credit cards and loans, you may be asked to include your savings. Savings is one of the most important aspects of an IVA, as it will be used to help cover your repayments.
As well as your contributions, you may have to make a lump sum payment to your creditors. The IP may also be able to ask you to reduce your payments, and they might even suggest the simplest of debt relief options, such as a Debt Relief Order.
It’s important to remember that you will be unable to spend on non-essentials such as a new smartphone, or a new car. This is because your income must cover your essential costs, and an IVA will ensure you can do so.
Although the IVA may seem overwhelming at first, it can be a very rewarding experience. You’ll be able to reduce the amount you owe, and you’ll be able to move on to a happier and more secure financial future.
The Benefits of an Individual Voluntary Arrangement was first seen on Debt Worries