A Easy Guide To An Individual Voluntary Agreement

By: Steve Smith Click author's name for more of his/her articles

In the time of the financial crisis it would seem that most people are in debt one way or another and struggling to meet payments. If you are on the verge of bankruptcy then there are options available to help with existing debts, one solution is taking out an IVA which stands for individual Voluntary agreement.

An IVA is a legally binding agreement between you and your creditors which is supervised by a Licensed Insolvency Practitioner. It is a good option for anyone that has unsecured debts of more than £15,000 who cannot make the payments and is on the verge of bankruptcy.

It is common that the creditor will have to compromise the debts owed to them in order to make an agreement between themselves and the debtor. It is normal for the creditor to lose money as the Insolvency Practitioner will look into the borrower's earnings and work from there as to how much monthly payments should be.

A contract will be put together once payments have been agreed by both parties. There is nothing that can be done to change the agreement once contracts have been signed by both creditor and debtor. This means that your creditors are no longer able to harass you for money or to make any actions against you.

IVA's are usually taken over a short period of time ranging between 3 and 5 years. Once all payments have been finalized and all the requirements that an IVA has asked for have been suitably met borrowers can find that 70% of their debt has been removed.

An Iva is not available to everyone to be eligable you will have to be in regular employment and have money to cover your living expenses. Your debt would need to be more than £15,000 and you must also be able to prove that you cannot make the monthly payments of the personal loan or credit card. It is important that you take into consideration the long term effects that an IVA can have on your credit rating and financial future.

Final comments

If you are looking into getting an IVA, it is important to do your research first there are a lot of fee-charging companies out there that are more interested in making a profit, they can actually make thousands out of you. Your best option would be to look at fee-free charging companies who only have your best interest at heart and can help give the best advice for your circumstance.

Article Source: ABC Article Directory

About The Author: Steve Smith writes for AllAboutLoans, Our visitors can apply online for debt consolidation, debt management and all other forms of debt help. Visit today and see what we can do for you.