April 19, 2024

Business Bib

Business & Finance Blog

“Paying Off Your Debts: Get the Right IVA Advice”

4 min read
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People usually acquire debt for two reasons, either they want to purchase an expensive item or service that they cannot afford upfront, or because of unforeseen circumstances like job loss. 

The options available to those with debt are many and varied, but the most common ones are; consolidating all debts into one single monthly repayment (usually at a lower interest rate), using a Debt Management Plan (DMP) where you make reduced payments to your creditors over an extended period of time, or an Individual Voluntary Arrangement (IVA). 

Deciding on the best option depends on each person’s unique circumstances – there is no “one size fits all” solution when it comes to dealing with debt. 

However, getting expert advice from a reputable source is always recommended before making any decisions about what route to take.

When it comes to paying off your debts, there are various options available – but which one is right for you? It can be difficult to determine the best course of action without professional guidance; however receiving IVA advice from a qualified source could help you clear your debts in as little as 5 years*.

An Individual Voluntary Arrangement – more commonly known as an IVA – is a formal agreement between yourself and your creditors whereby you agree to pay back what you owe over an agreed period of time through affordable monthly installments**. In return for this commitment, certain benefits are given including protection from legal action being taken by your creditors and usually freezing/stopping interest accumulating on what you owe  .

It is important to remember that an IVA should only be considered as a last resort option for dealing with debt and you must ensure that you are unable to repay what you owe in any other way before considering this kind of arrangement. This includes exploring alternatives such as budgeting, credit counseling, or speaking to your creditors directly about the possibility of changing the repayment terms that have been set.

If you’re struggling with unmanageable debt and are considering an IVA it’s vital that you seek professional financial advice first.

Understanding Debt and Individual Voluntary Arrangements (IVAs) 

IVA is a formal arrangement between you and your creditors to repay all, or part of, what you owe over an agreed period (usually five years). It’s important to remember IVAs should only be considered as a last resort option for dealing with debt and you must ensure that you are unable to repay what you owe in any other way before considering this kind of arrangement. This includes exploring alternatives such as budgeting, credit counseling, or speaking to your creditors directly about the possibility of changing the repayment terms that have been set. If you’re struggling with unmanageable debt and are considering an IVA it’s vital that you seek professional financial advice first. Understanding Debt and Individual Voluntary Arrangements (IVAs)An IVA is a formal arrangement between you and your creditors to repay all, or part of, what you owe over an agreed period (usually five years). It’s important to remember

Benefits of an IVA 

As an insolvency practitioner, I’ve seen first-hand the benefits that an IVA can have not only for the individual but also for their creditors. In many cases, it results in a better outcome than if the debtor was to declare themselves bankrupt.

An IVA is a way of avoiding bankruptcy and enables debtors to make affordable repayments that are agreed with their creditors. This means that, over time, they are able to pay back what they owe while still meeting their other essential outgoings such as rent or mortgage payments and utility bills. By contrast, if someone declares themselves bankrupt all of their assets are sold off (including any equity in their home) and this money is used to pay back what they owe – which may only be a small percentage of the overall debt. The remaining debt is then written off.

How to Find the Right Advice on an IVA 

When are facing unmanageable debt, it is important to get expert advice as soon as possible. An IVA could be the right solution for you but only a qualified insolvency practitioner (IP) can tell you for sure. A regulated IP will give you impartial and independent advice on whether an IVA is the best option for your circumstances and, if it is, will help you put one in place. If someone close to you has recently been made bankrupt, this can be a worrying time. You may be wondering what bankruptcy is and whether it could happen to you too. This guide explains what bankruptcy is, how it works and how to find the right advice if bankruptcy looms large on your horizon.