subject: Unmanageable Debts - How To Become Debt Free [print this page] If you are struggling with unmanageable debts is it about time you cleared them?
It's all well and good answering 'yes' to that question but how could you actually go about tackling those debts and getting rid of them for good?
There are several debt solutions available that could help you - an IVA (Individual Voluntary Arrangement), for example - but how do you know which, if any, would be right for you?
You could, for example
Seek IVA help
Seeking IVA help could establish if an IVA would be a suitable debt solution for you. Basically, an IVA is a formal debt solution that allows borrowers to clear their debts in (normally) five years.
If you enter an IVA, you will make regular reduced payments for the duration of the agreement, after which any remaining unsecured debt will be written off.
It is important to note, though, that before you can enter an IVA, voting creditors who own at least 75% of your total debt would have to agree to the terms laid down in your IVA proposal (which will be drawn up by you and your Insolvency Practitioner to show your creditors how you plan to repay your debt).
An IVA would not be suitable for you if you can afford your monthly debt repayments as they stand today. Plus, if you are a homeowner, you might need to unlock some of the equity in your property during the 54th month of the agreement (half way through the final year).
An IVA would have a negative impact on your credit report for six years from the time it starts, meaning you may find it difficult to obtain further credit for this time.
You may find that after seeking IVA help, an IVA simply isn't the best option for you. In this case, you may want to consider an alternative debt solution such as a debt management plan, or even bankruptcy.
by: Shelly White
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