Debt is a problem that can be very stressful. Some people may feel they have nobody to turn to. However you may not necessarily have to file for bankruptcy and you definitely want to avoid illegal money lenders. A good alternative to these options is an Individual Voluntary Arrangement or IVA (source).
The first thing to do is to discuss your debts with your creditors. It may be possible to come to an arrangement without making it official. For example they may freeze interest rates on the debt for a period of time. However in some cases this may not be enough.
The creditors have to agree to the IVA in order for it to work. In some cases there may be one creditor who is owed more than the others. In this circumstance they will have the major say in the agreement. An experienced practitioner should be aware of this when negotiating with a creditor.
An IVA will usually be a fixed term. This tends to be between three to five years. You need to repay it on a regular basis in order to maintain the agreement. It is also worth noting that this will affect your credit rating in a negative way.
It is worth knowing how this differs from a bankruptcy claim. One of the major benefits is that you are more likely to be able to negotiate what kind of assets are included and so can avoid losing property, vehicles and so forth. This is not something that is generally possible when filing for bankruptcy.
When choosing a company to handle an IVA it is vital that you do your research first. While they can draw up plans they may not necessarily enforce it. Therefore it is important to find a company with a good reputation who is prepared to work with you and your creditors to ensure that both parties stick to their part as agreed. It should also be noted that you will have to pay a fee in order to come up with an agreement so this should be checked as well.
In short you need to be sure that an individual voluntary agreement is appropriate for your circumstances. Therefore it is best to discuss this with an independent financial adviser. Asking around and comparing the different options available to you can help you get the best solution to difficult financial circumstances.
| Advice For Getting Individual Voluntary Arrangements |
| Debt is something that can be very difficult to deal with. The problem is that as debts pile up they get worse and worse. It is important to talk about it with a professional. They can recommend the best option for your needs. You may feel that the only way out is to file for bankruptcy but this does not have to be the case. One alternative you may not have considered is Individual Voluntary Arrangements. |
| The first thing to do is to discuss your debts with your creditors. It may be possible to come to an arrangement without making it official. For example they may freeze interest rates on the debt for a period of time. However in some cases this may not be enough. |
| The creditors have to agree to the IVA in order for it to work. In some cases there may be one creditor who is owed more than the others. In this circumstance they will have the major say in the agreement. An experienced practitioner should be aware of this when negotiating with a creditor. |
| An IVA will usually be a fixed term. This tends to be between three to five years. You need to repay it on a regular basis in order to maintain the agreement. It is also worth noting that this will affect your credit rating in a negative way. |
| It is worth knowing how this differs from a bankruptcy claim. One of the major benefits is that you are more likely to be able to negotiate what kind of assets are included and so can avoid losing property, vehicles and so forth. This is not something that is generally possible when filing for bankruptcy. |
| When choosing a company to handle an IVA it is vital that you do your research first. While they can draw up plans they may not necessarily enforce it. Therefore it is important to find a company with a good reputation who is prepared to work with you and your creditors to ensure that both parties stick to their part as agreed. It should also be noted that you will have to pay a fee in order to come up with an agreement so this should be checked as well. |
| In short you need to be sure that an individual voluntary agreement is appropriate for your circumstances. Therefore it is best to discuss this with an independent financial adviser. Asking around and comparing the different options available to you can help you get the best solution to difficult financial circumstances. |