IVA is an abbreviation of Individual Voluntary Arrangement. This is a contract between a person struggling with severe financial difficulty and a financial company who will help spread the debt over a five-year period and help protect your credit rating.
How To Apply For An IVA?
A person must have a minimum of £10,000 worth of debts to apply for an IVA. These debts can be spread across different credit and debt agencies, full details of which an agent from the IVA Company will look into, compile and report for you. The IVA agency will then act as the only communication between yourself and the creditors, negotiating the basic rate which must be paid off monthly and also acting on an any changes of circumstance. There are lots of IVA Companies online, including Varden Nuttall, who will help take the stress out of this situation and build a five year plan for you to clear any and all outstanding debts.
What If My Situation Changes?
Always expect the unexpected, as this may be how the debts were accumulated in the first place. Once the IVA agreement has been signed, if there is a change in your personal situation, it will be taken into full consideration, either good or bad, on how to progress. From winning the lottery to being made redundant, life-changing experiences could make this financial situation worse or relief the debt immediately. Should the rate of the monthly payment be no longer achievable, the IVA Company will approach the creditors to negotiate a lower payback rate. Once the contract is signed it must be adhered to at all times or the customer will be in breech of contract.
How Does This Affect My Credit Rating?
The debts incurred over a period which are no longer affordable to pay back will have been affecting your credit rating already and signing an IVA will not instantly approve it, but it could stabilise it and build it back up slowly. To be declared bankrupt is instant zero credit rating and an IVA can help avoid this at all costs. There will be a period where new phone contracts may not be accepted or new credit cards applied for as your credit rating is restored and strengthened. This will partly be to protect any further debt jeopardising the financial situation already present.
Is There Light At The End Of The Tunnel?
A problem shared is a problem halved. Thanks to IVA intervention, the devastating effects of having out of control debt can be life changing by finally have a secure and affordable plan in which to plan for a brighter future. As long as all payments are met and on time, with all changes of circumstance reported, there is no reason the anchor tied to your financial life will continue to weigh you down.