During the credit crunch, there was a rise in the percentage of UK residents that were facing insolvency. Many people chose to go with a bankruptcy and others used IVAs or debt management to deal with their large debt problems. If you happen to be a person in serious debt, make sure you weigh out all the options that are before you. If you don’t know the options you can’t make an informed decision.
The first step in making an informed decision is to look at the pros and cons of something like an IVA and ask yourself if it’s right for you. If an IVA sounds intriguing think about the benefits of it versus other forms of debt relief like debt consolidation, debt management, and bankruptcy. Some people just need to start budgeting better.
When we talk about the advantages of an IVA the list is quite long but there are also some definite disadvantages as well. One of the first advantages is that it will keep your debt problem a secret and the fact that you have an IVA will not be shared with others. The other great part of getting one of these solutions is that you will be debt free at the end of it.
One thing many people talk about, as an advantage of an IVA is that you will not lose your home if you keep up your payments. An IVA also doesn’t freeze your bank accounts and assets – you can keep using your regular account. You’ll likely be unable to have access to overdrafts and you wont be able to take out a small loan.
Five years is how long it will take you to pay off your IVA but the great part is that you may be able to write off up to 75% of your original debt. That’s a lot of extra money that you won’t need to pay back. An IVA does bind you into a contract but that doesn’t mean your creditors can contact you. This means that you wont be getting any more annoying phone calls from the credit card companies or collection agencies they work with.
The actual IVA document is a legally binding agreement so that means that your creditors can not take any action against you. They cannot make any demands. Business owners and directors of companies can continue to trade, which is very important to them. Without it many business professionals would likely not have been able to keep their employment.
There are some disadvantages to IVAs as well. Some companies that offer IVAs sell them as being perfect but that is not the case. First of all, an IVA will take 5 years to complete in most cases. A bankruptcy is only a year. IVAs are also registered with a insolvency list which could potentially be made available to the general public.
An IVA is closely monitored by an insolvency practitioner and one of the things they do is review your wage slips and salary updates. You cannot pay less than you earn into your IVA so this makes things difficult but an IVA is great for many other reasons.
Learn more about county court judgements : Stop by Gary Price’s site where you can find out all about IVAs and what they can do for you.
Tags: Debt, finances, insolvency, IVAs