Helpful Advice On Individual Voluntary Agreements

Many people have found themselves buried in debt and don't have an answer on how they are going to get themselves out of it

. The bills keep coming in monthly but you just can't afford to pay them, debt collectors are constantly calling or knocking at your door and the stress of it all is causing sleepless nights.

What can be done to help you resolve the situation and relieve the immense pressure you are feeling? Looking at an Indiviual Voluntary Agreement could be an option, many people are unaware of what this is, it is otherwise known as an IVA.

If you feel your debts are out of control and you are not sleeping due to the worry and stress of it all, an IVA may be able to help. An IVA is a contract that is put in place by a licensed insolvency practitioner it will be a binding contract between you and your creditor, it means that you can decrease the payments of the full amount owed. IVA's are ideal for people who are on the brink of bankruptcy.

With an IVA the creditor will almost always have to make compromise on the money that is owed to them. An insolvency practitioner will be involved to decide a sensible amount the debtor can afford to pay each month, this is done by looking at their earnings and taking into account living expenses, the creditor usually makes a loss on money owed to them.

There is certain information required from them the debtor for them to be eligible for an IVA, it is not available to everyone. To qualify for an IVA you will need to be in steady employment and be able to prove that you are earning enough money to live on after paying your loan.

A contract between both parties will be drawn up when the payment terms have been decided and agreed. The contract agreement cannot be changed once the contract has been signed by the creditor and debtor, meaning the creditor can no longer chase for payments as all interest and debts must be frozen the debt cannot be pursued and the creditor cannot initiate legal action to recover the money lost.

To meet the requirements of an IVA you will need to have an unsecured debt of 㾻,000 or more,you will be asked to supply earnings to prove that you cannot afford to pay the loan back every month. The period of paying off an IVA is normally between 3 and 5 years. IVA is a good alternative to bankruptcy but it is important to remember that it will have an effect on your credit rating.

Final comments

Individual Voluntary Agreements have been around for more or less 20 years and are very popular, they are not suitable for everyone, however they have helped many people in the past. If the debtor meets all the required payments on time and the debt has been cleared they could find that up to 70% of the debt has been removed. To find out how to qualify for an IVA search online.

by: Steve Smith

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