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You may be surprised at how much you can achieve without the help of a debt management company. Many people negotiate reduced payments with their creditors even getting them to freeze interest and charges on their accounts. If you have decided to go it alone, the following article will provide you with valuable advice on how to do this successfully.
IVA
An IVA is an agreement between you and your creditors. Unlike a debt management plan, an IVA is legally binding, meaning that once it is set up, you are protected from creditor demands and any changes to the agreement.
Unlike bankruptcy, an IVA means your financial situation will remain private. Only you, your creditors and the company dealing with your IVA need know. It is also less severe, meaning you will not lose your job or your bank accounts, both of which are possibilities when you are declared bankrupt.
Advantages of an IVA
- Only pay what you can afford
- No publicity
- Keep your current account(s)
- Write off a large percentage of your debt
- Legally binding
Disadvantages of an IVA
- At least 75% of creditors must agree to the IVA
- IVAs usually last for 5 years
- Your home can still be at risk if your creditors decide not to exclude them
- The IVA could well affect your credit rating
- If you do not keep to the agreement, the IVA will fail and you can still be made bankrupt. If this happens, the costs of the IVA will be added to your debts
An IVA can only be set up by a Licensed Insolvency Practitioner. You will find a list of companies offering IVAs in our directory.
Remember, Debt Advice 4 Free is a completely free, impartial service. Although the information on this website is provided by industry experts, it should never replace the advice of a debt adviser who understands your individual circumstances. You can visit the directory section of this website to find a list of companies offering these services.
What is debt consolidation?
Debt consolidation simply means replacing multiple loans with one new loan. If you have debts with different creditors, you can combine them into one loan using a debt consolidation loan.
Find out more about debt consolidation here >>