When you're deep in debt, you've got a few options available to you. You can declare bankruptcy, start a debt management program, consolidate your debt, or take an IVA (Individual Voluntary Agreement). Your individual financial circumstances will be the deciding factor on which path you should follow, but your options may soon become fewer.
Recently banks have been cutting down the number of IVAs they're willing to agree to. IVAs are becoming more and more difficult to arrange, so they're becoming unprofitable to debt solution agencies. This decrease in the availability of IVAs is bad new for those whose best option is an IVA. There are many others, however, that are being pushed into taking an IVA when there are other, better options available to them, so this shortage of IVAs is good news for them. IVAs are not cheap, and they're certainly not easy to arrange, so for many, there are far less taxing ways of dealing with their debt problems.
An IVA is an agreement that is arranged by an insolvency practitioner to help pay off your debt in a manageable way. They'll work with you and your creditors to come up with a payment plan that is agreeable to all parties involved. An IVA will not be accepted unless all of your creditors agree to it. They'll most likely agree if they're likely to recuperate the majority of the money owed to them. However, if you'd be able to pay off your debt with a different solution, such as remortgaging, they will be less likely to agree to the IVA.
An IVA should be considered if you're at least £15,000 in debt and if that debt is spread across three or more creditors. IVAs are also beneficial for those whose careers would be ruined by declaring bankruptcy. On the other hand, other options should be explored if you're enormously in debt and if you've got few assets. Each case of debt needs to be evaluated individually, so take the time to seek professional counsel before making and decision about how to proceed.
The best plan of action to begin thinking about an IVA is to make a budget to see where your money is going and how much debt you currently have. Once you've got this created and you have a good understanding of your own finances, take your budget to a professional debt solutions company. They will look at your budget, speak with you to understand the nature of your debt problem, and they'll advise you on how to proceed.
If you'd like to find a debt solution company to help you decide what to do about your debt problem, take a moment to fill out our simple debt form, and a SimplyFinance representative will contact you shortly to discuss your options.