It can be very difficult to juggle debts especially with the state of today's financial market it would appear that more people are struggling to pay off their debts. The average person has more debt than just what they have on their credit cards and even paying the minimum payment on that can take years to pay off. This can put people under a lot of stress especially when people cannot afford to make the agreed monthly payments.
There are numerous solutions around which many are unaware of, one of those is an IVA which stands for Individual Voluntary Agreement this is a legal binding agreement between the borrower to repay a portion of the debt owed this is supervised by a licence insolvency consultant.
Although the concepts of an IVA and a consolidation loan are alike the loans are very different. For an IVA all the interest rates and late charges are frozen and all payments are reduced dramatically so as the individual is able to afford it. This means that the creditor can not hassle or chase the individual for payments.
When looking into an IVA there are a few things people need to be aware of, it can be available to anyone who has unsecured debts of £15,000 minimum. In the terms the debt will be paid over a number of 3 to 5 years. After that period the rest of the debt is written off.
Paying back an IVA is worked out purely on the individuals earnings and what bills have to be paid monthly. Not everyone is entitled to an IVA for instance if the individual does not have a job or after bills there is no money left to play with they will not be entitled to an IVA.
An IVA is different to bankruptcy. Bankruptcy is purely for people who cannot afford to pay off their debts and should only be used as a last resort. It is possible to petition for one's own bankruptcy order but an order could also be applied by one's creditor. With an IVA you have more say on how one's assets are dealt with, obviously doing this in a responsible and satisfactory way with the creditors. It is also possible to keep one's bank account or one can still run a business which cannot be done if individuals opt for Bankruptcy.
Final comments
When the period of the IVA has finished and all the requirements have been adequately met and the debts have been cleared 70% of your debts could be removed.
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Steve Smith writes for allaboutloans where we offer all kinds of debt help, from
individual voluntary arrangements IVA's to
debt consolidation loans">debt consolidation loans. Visit Today http://www.allaboutloans.co.uk
