With the recent credit crunch hitting the whole country hard, many people have been struggling with mounting debts that spiral into thousands of pounds. The level of debt can become increasingly difficult to manage and this has lead to an increase in IVA Debt Solutions being arranged. What exactly is an IVA though and how can it help people to cope with the amounts that they owe?
An Individual Voluntary Agreement (IVA) is a repayment solution that is set up between the person owing money (debtor) and the people that they owe money to (creditors). They are becoming more and more common as people try to get themselves out of the vicious circle of debt repayments.
Setting up an IVA means that the debtor can pay off a percentage of the amount owed by making smaller monthly payments throughout the course of the agreement. These solutions are usually made with a time period of five years.
Throughout the course of the IVA, the outstanding debt cannot be subjected to any interest being added or have any late payment charges.
The creditors are also not allowed to get in touch with the debtor in any way when an agreement is set up. Under the specific terms of the IVA, all correspondence has got to go through the Insolvency Practitioner who has been appointed.
Once an IVA has been successfully completed any outstanding balances must be written off by the creditors, in many cases as much as 75%! Meaning no more debt for the people involved.
The amount of the payment each month is determined by working out what the debtor can actually afford to pay, to do this the debtor needs to supply any documents that may be needed for the calculation.
There are a few minimum requirements that are needed in order to qualify for an IVA.
Debts must be over £15,000.
3 or more different named creditors.
Debtors must be in receipt of a regular income which is not wholly dependant on benefits.
If you meet the criteria mentioned then you could significantly benefit from arranging an IVA Debt Solution so you should take some time to look into your available options.
