An IVA could help reduce Debt

If debt is escalating out of control and you cannot afford to make the minimum payment to all of your creditors, you should work out an amicable arrangement with each creditor in turn. If your total amount of debt is higher than £15,000, an Individual Voluntary Arrangement, or IVA, will come into good use.

An IVA is a practical way to clear debts by combining your debts into smaller, more manageable payments over a five year period.

However, all of your creditors will need to consent to your IVA. This is entirely at their discretion as they have the legal right to charge you for late payments and interest, thus increasing the value of your debt.

Who will suit an IVA?

An IVA is suited to those with excellent debt management skills and those with debt over £15,000 who owe money to at least four or five different creditors.

An IVA offers more protection from your creditors as they have no legal right to add on late payment charges or interest which increases your balance. However, you may have to use some of your assets to repay debt such as equity on your home or car etc.

With an IVA, a debt management company will ensure that you pay one affordable sum each month to cover all of your debt and thus reduce the worry of having to make individual payments on time, to five or more different creditors.