Personal debt is becoming an increasing problem in the UK. The recent economic climate means that more and more people are facing serious financial problems and find it a struggle to become debt free.
You may have heard of an IVA (Individual Voluntary Arrangement), government backed legislation which is designed to help you deal with your debt problems.
IVAs were introduced as part of the 1986 Insolvency Act, aimed as a viable alternative to bankruptcy. Bankruptcy comes with unavoidable long term implications, such as hindering future job prospects and losing high-value assets which is most commonly the debtor’s home.
Not everyone is suitable for an IVA. Government legislation states that only certain criteria are suitable for an IVA. Typically these are debtors with debts over £12,000 which they are unable to pay.
If you are suitable for an IVA, then there are many benefits for you. You only pay back the debt that you can realistically afford to. This means that you make a reduced monthly payment to your debts over an average of 60 months. Once you have completed your Debt Free IVA, any unpaid debt will be written off.
The IVA is legally binding which means that the creditors cannot chase you for this debt. As soon as your IVA has been accepted, your creditors will not be able to contact you or continue any recovery action against this debt.
IVA’s are a complex legal procedure and can only be proposed by a licensed Insolvency Practitioner. They will draw up a proposal which is affordable to you and also provides your creditors with more of a financial benefit then if you were declared bankrupt. 75% of your creditors, in terms of debt value, must agree to make your IVA legally binding.
You can be Debt Free with the help of an IVA. Government legislation can help you to deal with your debt problems. You should always seek expert advice about the IVA, so that you are aware of any benefits and implications.
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