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If you are struggling to meet your credit card and loan repayments, you may find that an individual voluntary arrangement (IVA) is the best way to bring an end to your financial problems. There are a number of different ways to tackle debt problems if you have overstretched yourself financially or a change in circumstances means you can no longer meet your repayments. Some people may find a debt consolidation loan or debt management plan can help them get back on their feet, but if you owe more than £15,000 you may find that an IVA is the best alternative to bankruptcy. An IVA will allow you to deal with your unsecured debts without putting your house at risk, as well as providing you with a clear path to becoming debt-free. The first step towards deciding whether an IVA is right for you is to work out the total value of your outstanding loans, credit and store card balances and overdrafts. You may find your financial position is worse than you thought when you do this. You will also need to work out how much interest you are accruing and how much you can afford to repay each month. At this point, you may want to seek professional advice to check your calculations are correct and to obtain a recommendation about what to do next. If you have multiple creditors, owe more than £15,000 and can afford to repay £200 or more a month, an IVA may be the best way to deal with your financial problems. You will need a qualified insolvency practitioner to negotiate the terms of the IVA with your creditors. The final deal is likely to involve the creditors writing off a proportion of your debt and also agreeing to stop charging interest on the money you owe. The terms will require you to make a set monthly repayment for a fixed period of time - usually five years - to pay off the rest of the debt. Although the payment will be set at an affordable level based on your earnings, you should be aware that it is likely to be a sizeable chunk of your disposable income. However, if you make all the payments, you will be debt-free at the end of the IVA period. An IVA will have a negative impact on your credit rating and you will find it difficult to borrow money in the period after it ends, but it does have far fewer side effects than being declared bankrupt. If you're looking for an individual voluntary arrangement then Debt Options can help you find the right solution to your debt problems. Our team have over 11 years experience assisting people with serious debt problems and have helped thousands of people with debt management programmes or IVAs.
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