Yes, we know — the New Year is already in full swing. But as we keep moving forward, it’s good to look backward at the goals that we set at the beginning. If you’re like many people, you really want to get out of debt. You really want to make sure that debt is no longer part of the conversation. You want to make sure that you have a way out of feeling so sad about your financial life. A life filled with good friends is a good thing, but not if you can never put gas in the car to see them! You will need to make sure that you’re going to be able to take care of your bills while you’re still taking care of the human side of life.
Thankfully, there are plans in place that can help you do just that. Meet the individual voluntary arrangement. It’s not going to be for everyone, but if you’re someone that’s in a lot of debt, you could find everything you need right in this structure. Here’s how it works.
The IVA focuses on creating a best offer agreement between the debtor and the creditors. However, the challenge is that it has to be arranged by a qualified Insolvency Practitioner (IP). These are people who are qualified through 7 main professional bodies:
Institute of Chartered Accountants in England and Wales (ICAEW)
Institute of Chartered Accountants of Scotland (ICAS)
Institute of Chartered Accountants in Ireland (ICAI)
Association of Chartered Certified Accountants (ACCA)
Insolvency Practitioners Association (IPA)
Law Society of Scotland
The important point to remember about the IVA is that it’s a written agreement (contract) between the two parties. As the debtor in question, you’ll be expected to pay back your debts at a lower rate (with less interest) for a fixed period. This is usually for 5 years, and then the slate is wiped clean. The creditors cannot come after you or demand payment of any kind after what you’ve paid. That’s something that can definitely solve your financial problems.
The IVA is seen as an alternative to bankruptcy that’s considered less damaging. It’s going to be up to you to make that decision. IVA’s are usually done for debt totals over 15,000 GBP. The IVA costs money and it can take more time, but it’s better to do this when you don’t want the creditors to be able to ignore the terms. Once they lock in, that’s it. You might wonder why they would agree to a lot less than what they could take you to court for. The truth is that they would rather get back some money than none at all.
Yet you have to make sure that your mindset abut money is changing. You have to make sure that you’re saving more money once you have the IVA finished. You also want to make sure that each and every payment is handled on time. If you fail to do this, the terms of the IVA can be made null and void. This means that you’re on the hook for all of the money plus heavy penalties. This is clearly not the direction that you want to take unless you’re absolutely serious about making a real change. Why not check it out today for yourself, while it’s still on your mind? You’ll truly be glad that you did.