People struggling with debt might be pleased to discover that a government-led scheme exists for people in England and Wales to help them get out of debt. The debt management solution is called IVA or Individual Voluntary Arrangement and offers some impressive benefits to those who qualify.
Knowing what the scheme involves, the criteria for applying and how to apply for an IVA can help you take the necessary first steps towards becoming debt-free. Below, we explore IVAs and discuss what you need to do to access one, plus how to use an IVA calculator to visualize your own personal arrangement.
What is an IVA?
IVAs or Individual Voluntary Arrangements are debt management solutions that take the form of payment plans. They can be highly beneficial for some people because they can result in a substantial portion of your debt being written off. A debt write off such as this is hard to come by, hence the rising popularity of IVAs.
When applying for an IVA, an insolvency specialist will negotiate with your creditors to have your debts compiled in one place so that you can make a single payment towards the balance each month. People use this solution as an alternative to bankruptcy, as it gives them a greater level of control over their assets.
IVAs are legally binding agreements, so it’s essential to make the minimum payments each month.
Benefits of an IVA
There are some significant benefits to acquiring an IVA if you qualify. These include:
Lower outgoings: Having an IVA means you can spread your debts out across several years, meaning you only pay a single, manageable amount every month. At the end of the agreement, a vast portion of the debt is usually written off. This is much better than the alternative that you may be currently facing, which is paying large monthly sums, plus interest.
Consolidate debts: Having all your debts in one place and knowing that you are dealing with them can offer you a great deal of peace of mind.
Freeze interest rates: IVAs result in the interest on your debts being frozen for the duration of the agreement. This means your debt won’t increase while you are making your monthly repayments.
Get up to 90% of debt written off: This is beneficial for obvious reasons. The main draw of IVAs is the fact that you can get a large portion of your debt entirely scrapped.
Stop letters and phone calls: Receiving constant messages from debt collection agencies and creditors can have a terrible impact on the quality of people’s lives. Signing up for an IVA means all letters and phone calls will cease because your creditors will see that you are proactively dealing with your debt.
If you would like some help getting out of debt, or if you would like to inquire about IVAs, feel free to reach out to us.
