Are Ivas The Way To Solve The Nations Personal Debt Problems?
In 2010, the UK personal debt stands at more than amount the UK produces in a year
, and so finding a solution for personal debts is crucial. Recently there has been a rise in IVAs, or Individual Voluntary Agreements, and whereas before this type of insolvency was aimed at businesses, they're now popular with individuals owing 15,000 or more in un-secured credit.
This year has not only seen the rise of IVAs, but also the decline of bankruptcy, revealing that Individual Voluntary Agreements are more popular amongst those wishing to become debt-free than ever before. Simply, an IVA is a legal agreement made between the debtor and an insolvency service practitioner, and the debtor agrees to pay off a reduced debt amount in monthly repayments.
IVAs are ideal for those who are in employment and want to pay-off unsecured credit debts. As an IVA offers the amount of debt owed to be reduced by up to 75%, the debtor is able to carry on paying for bills, mortgage, food etc, without the threat of creditors knocking on the door.
All contact between the debtor and creditor is lost once an IVA is set up, with the insolvency service practitioner the only one who is left to communicate with the creditor. Most creditors are accepting of IVAs as, if the debtor has no other means of repayment, the debtor could face bankruptcy and the creditor would not get any of their money back.
Anyone who is employed or self-employed, and owes 15,000 or more to 3 or more unsecured creditors could qualify for an IVA. A solution for both parties, an IVA can help debtors become dept free without resorting to bankruptcy, and creditors can get a proportion of what they're owed back.
by: Finley S. Hancock
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