Avoid Bankruptcy – Take the IVA!

You’ve no doubt heard about the IVA option. Most probably you’ve seen the adverts on television discussing IVA’s or you may have even seen them advertised in your local high street bank. Some of you may have even been offered the option of an IVA as a result of a review of your finances. So what is an IVA? What exactly do we need to know and is it the right option for us?

Well, if you’re £15,000 or more in debt and are looking for a way to combine, shrink and ultimately clear your debts then it might be the solution for you. If consolidation is not a viable option due to poor credit or lack of income then the IVA is really your only choice without declaring bankruptcy, which I am sure, everyone wants to avoid wherever possible.

IVA stands for Individual Voluntary Arrangement and is exactly that. An agreement made between you and the lender that is completely voluntary on your part. Your bank or third party lenders do not force IVA’s upon you. It’s completely your choice.

A typical IVA agreement will span over 5 years or 60 months during which time you will need to make a minimal monthly payment against the loan as you would with a standard personal or secured loan. The IVA will stay on your credit report for 1 year from the date of the final payment. This is nothing to worry about though providing you’ve made all your payments when they’re due.

If you fail to make a payment on your IVA however you may be forced to declare bankruptcy. In that respect, they should be considered and taken a little more seriously than your typical high street loan. If you’re sensible enough to consider an IVA before declaring yourself bankrupt then I’m sure you’ll do enough to make the month-to-month payment.

Your home will not be at risk with an IVA agreement either and there tends to be no arrangement fee with the lender. Both of these aspects of the agreement make it a huge selling point for people wanting to rid themselves of debt without having to go down the route of bankruptcy.