IVA | Debt Article

IVA UK debt management

What is IVA UK debt management?
IVA UK debt management is a government approved debt reduction scheme offered in the United Kingdom which helps people who are struggling under the weight of their debt clear their debts in five years. The scheme, which has become more and more popular in the last few months as the recession has started to take hold again and inflation has increased, also makes creditors call off any CCJs and bailiffs, both stressful in their own right to people in substantial debt.

To take advantage of a IVA UK debt management plan you must be in at least £15,000 debt to two or more different creditors. The IVA UK debt management plan will see your debts frozen at 0% interest, and after five years, any remaining debt will be wiped clear. You do need to get 75% of creditors by value of your debt to agree, and you will have to make monthly repayments towards your debt, which will be deemed affordable by the courts and a debt advisor.

How does IVA UK debt management work?
When you decide you have no choice but to seek IVA UK debt management help, like many do as an alternative to impending bankruptcy, you will be assigned a debt advisor, who will look at your level of debt, and advise you on the likelihood of your creditors accepting your IVA UK debt management plan.

The debt advisor will look at your income, and your outgoings, and will decide what they feel a reasonable repayment is each month. You should bear in mind that just £250 a month will clear £15,000 in five years. Many people pay more than that in interest on £15,000 worth of debt, so the IVA UK debt management will make a real difference.

After five years, any outstanding debt will be written off and you will be given a fresh start. You will however have a note on your credit record for six years, which may make it hard to get credit, although it’s better to be debt free and unable to get credit than £15,000 in debt and struggling.

Why would creditors accept my IVA UK debt management plan?
Creditors will accept most IVA UK debt management plans because they accept that bankruptcy is the customers only realistic alternative. The creditors will get more money back from you through a IVA UK debt management than bankruptcy anyway.