Individual Voluntary Arrangements (IVAs)
One of the more popular forms of debt relief, IVAs are commonly sought by people who may be struggling to balance debt owed to several different creditors at once. IVA support is available through various different ways and means, and as debt advice experts we are of course in a position to be able to advise you on whether or not such an option is both viable and beneficial to your route out of debt. Consolidating debt is a very attractive option for many people, and while some will be quick to take out easy loans to try and prevent creditors from building up, this can lead to further financial woes and stress down the line. Therefore, we are always happy to open up discussion on IVAs with anyone who approaches us.
An IVA is a viable avenue to take far ahead of other forms of debt relief such as sequestration and bankruptcy, which can often – and rightly so – be seen as the last port of call to take. IVAs can help individuals not only clear debt, but can also help them to understand how to avoid such situations in future. Therefore, this route can be incredibly useful – and if you ever require dedicated advice or support on these types of arrangement, we will always be in a position to help you further.
What is an IVA?
An IVA, as mentioned, is an Individual Voluntary Arrangement – and it means exactly that. It is an arrangement that you willingly enter into to try and relieve debt that you may owe to several different creditors at once. An IVA register can be set up and proposed by an insolvency practitioner, who will act as a third party and middleman for any contact with creditors who may be pursuing you. Should creditors agree to such arrangements – which is very common – you will then be expected to pay an agreed monthly amount to the third party in lieu of rising debts elsewhere.
IVAs can be a great route for anyone looking to gain relief from rising debt, balancing creditors and any interest that may be applied to debt recovery pursuing you. Speak to our Debt Advice Experts to find out more about what is available. People who apply for IVAs may be those who have multiple credit cards or loans to pay off – or whom may not know how to start paying off multiple creditors at once. It is therefore a fantastic option for those who find their heads – and bank balances – in a bit of a spin. It is, too, a great way to learn more about effective debt management – as debt consolidation can be hugely effective in getting creditors off your back if it is conducted through the appropriate channels.
How Will an IVA Application Work?
Once successfully arranged, an IVA will effectively keep your creditors in agreement with a third party lender – whom we can arrange for you to set up contact with. IVA practitioners will contact your creditors on your behalf to propose monthly repayments towards outstanding debt which will often be less than what they may be imposing on you already, either through in-house debt collection or extended debt recovery.
An IVA arrangement, in comparison with other debt management solutions we offer, can be long term – you will normally be able to satisfy this type of debt solution within a few years – normally up to six - if you are juggling several lenders at once. Your circumstances and needs will apply – but IVAs are arranged to help make debt relief that little bit more manageable for those who may not necessarily be au fait with lending and borrowing. Certainly, it is one of the most popular options available to those who have never been in debt before – and it is therefore one of the main options we will look at with you should you need to approach us for support or advice.
Your IVA will very likely go ahead if creditors accept your proposal – and providing those who agree account for at least 75% of your total debt. It’s also worth knowing that once you’ve cleared your debts, any unsecured amounts remaining will be written off provided it is included within your Individual Voluntary Arrangement. If it is not included within the arrangement, it will of course remain outstanding.
Why an IVA May Help – and Why it May Not
This method is certainly the action to take if you are juggling several balls of debt at once – and it is a great way to consolidate anything you owe into one easy payment each month. There are some IVA pros and cons to consider before entering into one of these plans. It is inarguably a safer option to approach an insolvency practitioner than to dive straight into quick-fix loans which may carry detrimental effects further down the line. It is also a great learning experience – and, with a friendly debt support advisor at your side, it is often one of the most recommended routes to take if it is your first time experiencing debt. If an interim order is applied for during the process, it may even prevent you from facing further action taken by creditors – and it may even slow down or cease debt collection activity. There is no strict guarantee, however, that this will be the case.
IVAs must be adhered to at all times or you may face further penalties – and it is a debt relief option that may apply only if it is taken up within a reasonable delay. If debt collection activity is too far gone, for example, you may not be able to qualify for direct relief which could prevent you from falling into bankruptcy. If you are unable to make monthly payments – even those deemed lower than that which you are expected to pay to creditors directly – this type of arrangement may not be convenient for you. However, it is always worth bearing in mind if you are struggling to balance the books, and if you are looking for a short term fix. Never worry – debt solutions and advice are always on hand if you find that you are unable to clear debt expected of you up front and on time – but if you apply for an IVA, you must agree to clear the monthly repayments – at the very least – by the dates agreed between you and your insolvency practitioner.
Can IVA Arrangements Affect My Credit Rating?
This is a popular question and it is certainly one that needs to be asked – as it will have a detrimental effect upon your future credit scoring, as will many other forms of debt consolidation and arrangement. However, compared to other arrangements such as bankruptcy – which leaves a mark on your credit file for up to six years – it may not be quite as impactful. Regardless of whether or not this is the case, an IVA can still impact on future credit you may aim to apply for. This is one of the points we will establish with you and discuss with you in more detail as part of any potential debt management plan you may wish to embark upon.
Other Debt Solutions to Try
IVAs propose just one solution to a whole series of worries and stresses that can arise with debt problems. As part of our debt solution expert services, we aim to offer a wide range of different choices and idea to help our customers reach the best possible decision in terms of their debt and finances moving forward. Here are just a few of the alternative options we may be able to suggest to you during consultation:
The option of Debt Sequestration in Scotland or Bankruptcy in the UK is often viewed as the most drastic solution to debt management, and as such it is often treated by debt advisors as an option to take when all other possible routes have been exhausted. This process will result in you declaring bankruptcy and effectively erasing all debt from your record – but you will lose control of your assets and it can affect your credit rating.
Our team can provide Debt Consolidation Help if you would like to put all of your debts into one smaller affordable repayment. This reduces the stress of dealing with different lenders all at the same time.
A Full and Final Settlement Offer can be very popular and also very useful – these will enable you to approach your creditors with a suggested repayment that may not be the whole amount they are pursuing for. Depending upon your circumstances and other means, you may result in clearing your debt sooner than you imagined.
Some people will choose the DMP Solution which is also known as a Debt Management plan. These plans can be extremely useful if you wish to seek support on splitting up payments to certain creditors. These work in a similar way to an IVA, though Individual Voluntary Arrangements have slightly different terms and uses.
There is also the Debt Arrangement Scheme (DAS) which is available for Scottish residents to help make repayments more manageable if you are dealing with many debts.
For people in Scotland you can get Trust Deed Advice which is a similar option to the Individual Voluntary Arrangement UK residents use. Our team can discuss these different options with you to help come up with a solution for your money worries.
These are just some of the ways in which we can help you – we understand that owing money can be stressful – and for that reason, we’re here for you seven days a week to help break down all of the red tape and to ease the headaches that can come from owing creditors money and interest besides.
There are lots of different ways we can help – let us start helping you by calling us today on 0808 223 4188 or emailing us at your convenience – and we can discuss the options.