Becoming debt free doesn’t have to be the nightmare everyone thinks it is. The issue most of us have when it comes to managing our debts when they’re spiraling out of control is a lack of knowledge as to what options are available. So I’m going to show you how you can write off a proportion of your debts, reduce your monthly repayments, never have to hear from your creditors or receive demanding letters ever again and become completely debt free in 5 years.
Does this sound too good to be true? Well it’s absolutely true, backed by government legislation and can be totally managed by professional debt management companies, leaving you to carry on with your life in peace.
This is an Individual Voluntary Arrangement or IVA. Working closely with a debt management company such as Harrington Brooks you will soon see the benefits of this debt management option. So let’s discuss IVA’s in a little more details.
How do I qualify for an IVA?
In order to be successful in your application for an IVA you must meet a certain criteria. An IVA isn’t suited to every situation but if you qualify it could be the answer to your prayers.
What is your debt level? – Do you owe £10,000 or more and have at least three lines of credit with a minimum of two creditors? If so you could be on to a winner. If you don’t you may be better off looking at either a debt management plan, debt consolidation or if your circumstances are worse you could look in to bankruptcy.
Are you unable to make your repayments? – If you can prove that you’re insolvent which means you can’t afford your repayments and the total value of your assets is less than your total debts you may be able to qualify. This doesn’t mean you have to sell your home but if you own multiple homes and multiple cars you will not qualify as these assets are not strictly essential and could be liquidated to pay your debts.
Where do you live? – An Individual Voluntary Arrangement or IVA is only available to individuals living in Wales, Ireland or England. If you live in Scotland you do not qualify but you may be eligible for an equivalent known as a Trust Deed.
How much can you afford? – It is generally expected that you should be able to make a minimum monthly payment of £150 to cover the costs of your debts.
Can you prove your inability to pay? – Income and expenditure calculations can help you to prove that you are indeed insolvent.
Are there any other benefits other than becoming debt free.
Well, if being debt free isn’t benefit enough, an IVA does have some extra bonuses and I think you might like them.
Wipe out a proportion of your debt – The idea of an IVA is to show you’re willing to make a concerted effort to pay off as much of your debt as you can over a five year period. If you stick to your arrangement any remaining outstanding debt will be written off by your creditors.
One single monthly payment – Rather than paying each multiple creditors every month a debt management company can manage this payment on your behalf. All you need to do is ensure you have enough cleared funds in your bank account to cover your repayments and they will do the rest, ensuring each creditor get the right payment at the right time.
Creditors MUST leave you alone – When you’re accepted for an IVA your creditors must not contact you by any means unless you fail to make the repayments. If you use a debt management company and you find that creditors are still harassing you, simply call your account manager with the details and they will remind your creditors of their responsibilities.
Freeze your interest rates – Some debt management companies work hard to build relationships with creditors in order to get the beast deal for you. Although this isn’t guaranteed and shouldn’t be expected it can be arranged in some instances.
It cannot be changed by the creditor – Once an individual voluntary arrangement has been agreed your creditors cannot make any changes to the agreed repayment. The IVA is a legally binding document that both parties must adhere to.
No legal action can be taken – When a creditor accepts the terms of an IVA they forfeit the right to take any legal action unless you fail to meet your monthly repayments.
Fixed term agreement – As long as you make your repayments every month the term of the loan is fixed so you know exactly when your IVA will complete leaving you debt free.
Do you think an IVA is the right option for you?
To be successful with an IVA you must ensure you can keep up your new monthly repayments. This is a five year plan to becoming debt free so you must make sure your IVA is a priority. If you fail to do so your creditors can seek alternative methods of recovering the debt including bankruptcy and you could be in a far worse position than when you first started.