Advantages
A single affordable monthly payment, which is based on your disposable income. A fixed repayment period (usually no more than 60 months). An agreement that your creditors will freeze interest and stop any charges so your debt balance does not increase. Protection from further action by your creditors. On completion of your IVA your creditors legally write off any debt outstanding. If you own a home, you are unlikely to lose it as long as you comply with the terms of your proposal.Disadvantages
You may be required to introduce an element of your equity into the IVA, usually towards the end of the IVA. 75% of the creditors based on the value of debt have to agree to the IVA There are restrictions to certain types of expenditure. The Supervisor must be advised of any changes in personal circumstances arising during the IVA. Depending on the level of overtime or bonuses an individual receives, they may be expected to contribute an amount of this towards the IVA.IVA (Individual Voluntary Arrangement)
An Individual Voluntary Arrangement is a solution that has been set up by the Government to help individuals who are struggling with debt. An IVA typically lasts for 60 months (sometimes 72), at which point at the end of this time frame, you will have a portion of your debt written off. During your time on the IVA you will have to make a contribution each month towards the IVA, this will be based on your calculated disposable income.An IVA is not suitable for everyone, as peoples circumstances are totally different. What’s right for one person is not right for another. Our trained advisors will be able to tell you on the first call whether or not we can help and which route would be best for you.
The IVA solution does affect a clients credit rating typically for 6 years, however most people just want an end to their worries and as such don’t want to be adding to their debt whilst they obtain help. A licensed insolvency practitioner has to set up an IVA, an individual cannot just do one themselves. Once an IVA is set up there will be an agreement with your creditors that will freeze interest and stop any charges so your debt balance does not increase as well as protection from further action by your creditors.
Case Study
Mr and Mrs N, from Gwent.
Mr and Mrs N, from Gwent, came to us in October 2009 with £16,000 of debt over 5 credit cards and they were paying around £550pm to them. After one phone call to an advisor they had been set up with a payment of £230pm. Within 6 weeks, all the interest had been frozen on the cards. Then in a years time, having made good inroads into the debt, Mr N used his redundancy money to clear all the debt off in full through our full and final department which saved them approx £6,000 in total. Mrs N, had this to say about Debt Support Service, “You have helped me fantastically over the months, we were having a very bad time of it initially when my husband was diagnosed with cancer. I would rate your service 10 out of 10 and would recommend you to anyone.”