Have got unsecured debt levels over £12,000? Do you find yourself missing minimum monthly payments? Do you have three or more creditors?
If you can answer 'Yes' to the above questions, then an Individual Voluntary Arrangement, otherwise known as an IVA, could be your best solution to becoming debt free and be a loan alternative for you if you have been refused a loan to consolidate unaffordable debt.
IVAs were introduced by the Government as part of the Insolvency Act of 1986, and this legislation is designed as a less severe and more practical alternative to bankruptcy.
An IVA is a legally binding contract between you and your creditors, so as long as you maintain your monthly payments, then your creditors cannot take any legal action against you. An IVA involves the debtor making monthly payments which are based on your income, so you are only paying back what you can afford.
Once you have made your final IVA payment, any outstanding debt is automatically written off as part of the agreement. The typical term for an IVA is 60 months. Creditors are willing to pay off this debt as they benefit more than if the debtor declared themselves bankrupt.
If you were looking for a loan to consolidate your unaffordable debt but have been refused a loan, then an IVA could be for you. The benefits of an IVA may sound too good to be true, but you have a legal right to propose an IVA, which is subject to the agreement of your creditors. No other solution, except bankruptcy, can write off any part of your debt.
If you are a Scottish Resident, then the Trust Deed is your legal equivalent.
If you want to hear more about how an IVA can work for you, and if you are suitable, please call our expert advisors on 0800 048 1769.