To save people in the UK from bankruptcy, various new schemes and solutions have been initiated
. The UK Insolvency Act 1986 introduced the concept of IVA (individual voluntary arrangement). According to this concept many people who are in a major debt problem, due to any reason, can solve their debt burden in a very easy and simple way. If you are not able to pay back your creditor in a specified time then you don't have to worry if you are a member of an individual voluntary arrangement.
Now let's understand how the IVA works. Well, if you are not able to pay your creditor then you will be given a specific extra time period of 5 years in the individual voluntary arrangement scheme. This extra time will help you to gather the amount and if you want you can pay the complete amount in one single shot itself.
The best part is that the creditor won't charge you any extra interest rates. Moreover, they won't bother you in the specified time period of 5 years. After 5 years if you still cannot pay the entire amount then also you won't be declared bankrupt, as the rest of the amount will automatically get deducted and you will be considered debt free.
But, to be a part of IVA your debt amount must be more than $18000. Also you need to have a constant income so that you can pay a monthly fixed installment of $250 for your debt.
Some loans cannot be included in the individual voluntary arrangement. People with loans like the educational or secured loans cannot take this advantage at all.
The individual voluntary arrangement has proved to be one of the biggest helps for all those who are a victim of debt problems. With the help of this arrangement, almost 50% of the debt affected people have been able to overcome it in just 5 years.