Staying on top of your debt is a lot easier if you seek out professional debt advice early. The sooner you face up to the burden of mounting debt, the greater your chances are of being able to find a debt solution that can free you from debt while helping you to avoid filing for bankruptcy. For those with more serious debt problems, that is, those with more than £15,000 worth of unsecured debt between three or more creditors, there is only one real alternative to bankruptcy. The Individual Voluntary Arrangement (IVA) can free you of debt, allowing you to pay only what you can afford for a fixed term, after which any remaining debt will be written off and you’ll be debt free.
Anyone who is struggling to maintain their agreed debt repayments should get help straight away but the problem will only be solved by reducing the amount you pay out each month. An IVA is a legally binding agreement between you and your creditors that allows you to do this, while letting all concerned parties know exactly where they stand and what’s expected of them.
The IVA’s not going to suit everyone. After all, everyone’s financial situation is different, the circumstances that lead them into debt will be different and their ability to manage this level of debt will be different. This means that the debt solution that is best suited to them will also be different. It’s important to remember that the scale of the debt problem is not actually defined by the size of the debt but rather your ability to manage the repayments. You need to talk to an impartial debt advisor with experience of dealing with a range of individual’s cases and debt solutions.
Should you find that an >IVA is the right debt solution to suit you and it is approved by your creditors, your unsecured debts will be consolidated into a single, regular monthly payment. This payment will be made to an assigned Insolvency Practitioner, who’s the only person legislated to deal with an IVA, who will then distribute the payment amongst your creditors. The idea of this monthly payment is that it is lower and more manageable than the payments that you have been making. The IVA normally lasts five years, after which time any remaining debt is written off and you’re debt free.
The Insolvency Practitioner, or IP, will draw up the IVA proposal and put it to your creditors. For your IVA to be approved, you will need 75% of your creditors to vote in favour. That percentage is not defined by number of creditors but by level of debt. It’s vitally important to find out more about the variety of debt solutions on the market so talk to a professional. If you’re unsure about the options open to you, they’ll be able to guide you but even before then, take one of the free debt health checks that are readily available online. Visit www.debtsolver.co.uk for more information.