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IVA and Unsecured loans

Individual Voluntary Arrangements (IVAs) have been the subject of much discussion in recent years, and they can indeed be hugely helpful to people in certain circumstances. If you have debt from unsecured loans that you cannot manage to make the payments for, then an IVA may indeed help you.

Anyone who can no longer meet their debt payments should ideally speak to a professional expert as soon as possible. An Insolvency Practitioner can not only handle your case legally, but can also give you trustworthy guidance about what measures are in fact likely to help in your particular situation.

Circumstances

Unsecured Debts

If your debts total at least £12,000 and are owed to 3 or more lenders, there is a good chance that you will be able to use an IVA. The purpose of an IVA is not to have your debts written off, but to give you a realistic chance at clearing them. Normally you will pay back less than the full amount when you use an IVA, but once the term has elapsed the debts will be considered to be settled.

Once an IP has a good idea of your overall financial situation, they may well suggest using an IVA. In this case you will work out what you can afford to pay each month towards your IVA, and your IP will present it to your lenders.

Proposal

There is no guarantee that your lenders will go ahead and accept the proposal, but with the right proposal there is a good chance they will. If you can’t make your payments there is always a chance that you may end up becoming bankrupt, in which case the lenders may receive less of the borrowing back than if they accept the IVA. This means that IVAs are genuinely seen as appealing enough to lenders to succeed.

Protection

As soon as the process that your IP carries out begins, you will immediately be protected from legal action from your lenders. Initially this is done using an Interim Order, and then using the IVA itself. Both of these prevent your lenders from pursuing your debts legally, and so you can enjoy the security and reduction in stress that this inevitably brings.

Payments

Typically, an IVA will involve paying at least about £200 each month, but whatever the monthly payments are you should be able to make them while still having enough money left to live well. It is hugely important that you think you can realistically afford the payments that you’ve proposed as part of an IVA. If you fail to meet the payments during the IVA, there is a chance that it may fail, leaving you exposed to legal action.

An IVA that s manageable, and that you do in fact keep to, can truly offer you the ability to work towards your loan debt being cleared. Any amount outstanding from the original debt will be written off at the end of the term, and you can get on with a life free from the stress and misery of debt trouble.

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MoneyHelper

If you’d like more information on other sources of free debt help and advice you can visit MoneyHelper – an organisation, backed by government and set up to offer free and impartial advice to those in debt. - Click here to visit MoneyHelper