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Feb 10, 2016

The global credit crunch has caused chaos in the financial markets over the past year, and many of those in deep debt have had to turn to solutions such as an IVA, which could help them to escape debt more quickly.

An IVA is known to be a softer form of bankruptcy, and is an effective way for many people to get themselves out of debt more quickly if they are in unmanageable levels of debt. The full name for an IVA is an Individual Voluntary Arrangement.

Over the past couple of years companies that deal with IVAs have been engaging in more advertising, and this has resulted in increased awareness about this debt solution amongst consumers, and subsequently in increased interest in this solution.

An IVA or individual Voluntary Arrangement is a solution that could help many people in debt, and many of these borrowers may be able to escape the harshness of bankruptcy by opting for an IVA IVA is a process that gives borrowers the chance to get out of debt far more quickly, and is known as a softer alternative to bankruptcy.

There are specialist firms that deal with IVAs and debt charities can also offer more information on this process if you are interested in opting for the IVA route. However, you will only be eligible for an IVA if you meet the set criteria required for this process.Generally you will need to have unsecured debts of at least ?15,000 with a number of different creditors, and you or your partner will need to be in full time employment to qualify for this process.

An IVA should not be looked upon as an easy solution to get rid of your debts, as it can be a long and stressful process, and can really impact upon your financial future and credit said, you can benefit in a number of ways from entering into an IVA. You will have to make just one affordable monthly repayment each month, you could find that you are debt free within just five years, and you may have a lot of your debt written off as part of the process.

With an IVA your single monthly repayment is distributed between the various creditors on a pro rata basis, based on the amount that you owe to each lender, and these repayments usually continue for a period of five IVA is legally binding so you must make sure that over the term of the agreement you stick with the terms and repayments. After the five year period any outstanding balance tends to be written off, leaving you free of debt.

Those that cannot or do not wish to enter into an IVA can look at various alternative solutions that may prove effective, such as reaching an informal arrangement with lenders, entering into a debt management plan, or consolidating the various debts into one loan

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