You have probably heard about it but you don’t know for sure how this could help you. It is very simple. IVA will help you to pay off your debts in less than five years! Moreover, you will have the benefit of legal protection, which means that, in this period, you won’t have to pay any interests or delay penalties.

 To take advantage of this individual voluntary agreement you only have to sign a formal agreement with your creditors. Through it, you will have the possibility to pay a percent of your debt in a determined period. IVA represents also the best solution for the ones that have too many debts and are trying to avoid bankruptcy and its negative effects.

Moreover, it is offering you a better handling of your debts and also the assurance that you won’t accumulate any more debts during your contract. IVA has no limits regarding debtors. It is addressed to a person that has a regular income and which, in the past, applied for loans and is not able to pay them off in the present. So, if you think that bankruptcy remained the only way out to get rid of debts, give it another thought! If you find yourself in this situation, IVA is the best debt solution for you. In a few words, signing these individual voluntary agreements means that your creditor will reduce the amount of money that you owe in change of your commitment to pay monthly a percentage of your income, during the next five years. The first thing that you have to do is to ask specialized advice.

Financial counselors will help you find the best creditor with the most appropriate conditions and criteria for your financial situation. They will present you the market offers and once you decided upon some, counselors will send your file to the lenders you selected. Once the IVA is signed, your debt will be reduced and monthly payments will start. So don’t follow the final solution of declaring yourself bankrupt.

Apply for individual voluntary agreement and provided you maintain payments – five years you will simply delete all your  unsecured debts!

However, there is a form of government help which may be able to offer you help with your debt by allowing you to be free of your unsecured debt in just 60 months. This is known as an Individual Voluntary Arrangement (IVA).

What is a Debt Free IVA?

IVA legislation was introduced as part of the Insolvency Act of 1986 as a more realistic alternative to bankruptcy. It allows those who have high levels of unaffordable debt, typically over £15,000, to be debt free in as little as 60 months with the distinct advantage of avoiding the stigma and long term consequences of bankruptcy.

A debt free IVA is an agreement between the debtor and their creditors. Once the creditors have agreed to the terms of the IVA, a debtor must commit to making set monthly payments for a standard period of 60 months. The monthly payment will be based on individual financial circumstances, and the Insolvency Practitioner (I.P) will help the debtor to agree an affordable monthly payment. As long the terms of the IVA are complied with, the debtor is granted to have any of the unpaid debt written off.

Advantages of an IVA

If you qualify for an IVA then it is often the best way for you to become debt free.

You agree to pay your creditors a monthly payment that you can realistically afford, for a typical 60 month period. Although you will have to pay back a proportion of your debt, it does have the distinct advantage over bankruptcy as you do not have to risk losing your home or hinder your future job prospects.

An IVA is the only debt solution (apart from bankruptcy) which allows you to write off debt which you cannot afford to pay back to your unsecured creditors. It can often be an incentive to know that you will be debt free in a set time frame, often 60 months, as opposed to a Debt Management Plan where you will be paying back all of your outstanding debts for many years to come with no fixed completion date.

Both you and your creditors will be bound by the terms of the IVA, which can offer you some real advantages. Your creditors will not be allowed to pursue any further legal action against your debt providing that you keep to the agreed terms, and they cannot add any further interest and charges to your debt.

Disadvantages of an IVA

You should always be aware of any disadvantages which might come along with a Debt Free IVA.

You must be able to make sure you can afford the payments for 5 years, although your I.P will help you come to a payment which you can afford after cost of living expenses have been deducted. If you fail to make your monthly payments then your assets will be at risk as creditors can start bankruptcy proceedings against you. If at any time during the IVA you feel as though making payments is going to be a struggle, then it is important that you get in touch with your I.P before you miss your IVA payment.

Can I be Debt Free in 60 Months?

If you think that becoming debt free in 60 months with an IVA is the right debt solution for you then please get in touch with DebtFree.co.uk. Our specialist debt advisors will be able to take you through your financial situation and see if you are suitable for an IVA.

You should be aware that not everyone qualifies for an IVA, and even if your IVA is proposed to your creditors this does not guarantee it will be accepted. For your IVA to be accepted, 75% of your creditors (in terms of debt value) must agree to it. Even if the other 25% decline the IVA, they will still be legally bound by the terms.

Are there Debt Free Alternatives?

If you think that an IVA is not the right debt solution for you, or you wish to explore your alternatives, let DebtFree.co.uk help you. We have access to a number of leading debt solution, so no matter what your level of debt or how many creditors you have, we are confident that we can find a debt solution which is right for your financial circumstances.