Is an IVA right for me?

Is an IVA right for you?

Britain is in a suffering state. The recession that hit Britain has only just ended, families and businesses are having to deal with the aftermath. The country has been left with a shocking deficit that stands at a remarkable 156 billion pounds – and so far the new government has only drawn up plans to tackle a small 6 billion pound proportion of it. With most households harbouring an average debt toll of 60 thousand pounds,should IVA's and other debt management plans be considered in order to mend the broken country and prevent certain bankruptcies?

An IVA ( individual voluntary agreement ) is a free plan designed to help people manage their debts. It works by breaking down the amount you owe into small monthly payments. An IVA is a legally binding contract, freezing the interest rate on the money you owe – and chopping down the size of the debt by substantial amounts of up to 80%. When the IVA begins you will have to pay the low monthly payments for a duration of 5 years. The size of the monthly payments would be calculated by your IP, otherwise known as your insolvency practitioner. Sounds great, but do you qualify?

The first thing to consider is that you have to owe over 15,000 pounds of debt to be eligible for an IVA program. You also have to bear in mind the fact your creditors must agree to accept a lower return on the money they originally lent.  Therefore it must be a majority verdict amongst your creditors, standing at a 75% approval.

If you are eligible to start an IVA you have to consider the negatives. The main being the bad credit rating your bound to inherit, preventing your from re-mortgaging. So, you have to ask yourself, is an IVA the best solution? Can I pay for my debts by releasing equity from my property or even downsizing?

Information on IVA Programs may help people who are addicted to the use of their credit cards. IVA's, Individual Voluntary Arrangements, can offer debt relief and an opportunity to break free from the cycle of borrowing that so many people in Britain have found themselves in.