How To Get The Best IVA Advice For Your Own Circumstances
Monday, October 19th, 2009 Subscribe To Our Feed
When people get into financial difficulty over their debts they sometimes seek debt management help. Debt management comes in many forms and the daddy of all of these is the IVA or Individual Voluntary Arrangement (sometimes known by different but similar names such as independent voluntary arrangement, individual debt agreement, etc.). The IVA is a particularly powerful tool because under the terms of its operation it can write off up to sixty percent of a person’s debt (sometimes more) which makes the resulting monthly repayments far less than with an ordinary debt management program. Therefore an this arrangement is the one that most people choose and good IVA advice is much sought after by people who are already aware of the various options.
Debt management or relief programs are also known as debt plans or settlement plans. These are designed to weigh the client’s income against his or her expenditure and calculate the extra free money which is available on a monthly basis with which to pay back creditors. The creditors have to agree to the terms and then a plan is drawn up which will ensure that the debt is paid off over an agreed number of years, referred to as the term of the plan or program.
It should be noted that this personal debt is treated as a whole sum, in total. Good IVA advice is dependent on this largely unbiased approach. Individual debts to particular creditors (banks, credit card companies, store cards or hire firms, vehicle financing loans, and similar accredit agreements) are not singled out for special treatment, but the whole debt is treated exactly the same and without any differentiating features of preferences. It is only with this level of trust, and from the point of view of a level playing field, that all the creditors may begin to approve what is being proposed, in the full knowledge that one of them is not being treated more fairly than another.
Any IVA advice thus given will similarly include a whole-of-debt approach and the large sum written off will be divided equally between all sources. After five years the whole of the debt will be discharged and the client’s credit record will be clean. During this time no creditors are allowed to contact the client and anyone who does may expect the full weight of the law to descend upon them.
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