Many people thinking about undertaking Individual Voluntary Arrangements to put a stop to escalating debt problems find themselves overwhelming by the multitude of confusing information about what it might all entail. Some of the less reputable companies make lurid promises to ‘wipe out debts fast’ and their sales patter means key facts are sometimes obscured.

In this quick guide, we set out three plain facts about each of the important three stages of an IVA – namely would it be the right option for you; what might make people decide to enter one; and rebuilding your credit at the end of the agreement. This could help you gain clear, concise information before you approach an expert debt management company for proper advice on the best way forward, according to your unique set of circumstances.

3 Important Factors In Deciding Whether An IVA Might Be Right For You

1. There’s no substitute for impartial, independent debt advice to really get a clear idea of whether an IVA is going to be the best option. IVAs are agreements which are fully recognised in the courts and it isn’t possible to arrange to enter one without input from key professional practitioners.

2. Whilst in the initial stages of arranging an IVA, you would always be guided through the process of checking that it is the right option for you. Sometimes it can be the case that other informal or formal options are also open and more appropriate, including bankruptcy for some people at this stage.

3. Generally speaking, they are going to be an option for times when you owe £15, 000 or more if you add all the debts together, and owe this amount to at least three creditors. The best advice here is to always obtain professional debt advice, as there is no single set rule for who can apply here.

3 Facts On Why People Choose Individual Voluntary Arrangements

1. Individual Voluntary Arrangements represent a fully legal way to end common debts which have become out of control and arrive at a new start at the end.

2. IVAs last for at least five years and this will present a faster route of debt for some people, for example, when their finances would make meeting the requirements of debt consolidation loans or Debt Management Plans extremely onerous. To give you a general idea, debt consolidation loans could be viewed as an option for less serious, less troublesome debts in contrast to an IVA, viewed as commonly applied to more difficult debts totalling £15,000 or more. With this said, the most important step to take is always to get professional advice to discover how this might apply to your real-life financial circumstances.

3. If it was ever the case that you didn’t always find budgeting an automatic, easy skill before you entered your IVA, you may find that the help of a good Insolvency Practitioner actually leaves you in a better position to manage your financial affairs at the end of the agreement. Its been suggested that a staggering 80% of those with debt consolidation loans actually end up taking on even more debt rather than ending the problem. For people who manage to keep to IVAs, instead they are able to gain an end to the problem debts covered, without an obvious risk of taking out more inadvisable credit during the agreement.

About Rebuilding Your Credit After Completion

1. At the end of properly managed IVAs, the three major credit reference agencies and the Government’s Insolvency Service will be informed in writing that the agreement has reached a successful conclusion.

2. At this stage, its vital to then order a copy of your credit file in order to make sure it has been accurately updated and that all your details are correctly entered. In some cases, this helps towards rebuilding your credit score.

3. At the close of your IVA, you may feel as though it’s a good idea to take out credit cards again to begin rebuilding your credit status. If this sounds like you, it’s important to make sure the cards have lower interest rates. You may discover lenders are interested in your having fully complied with the terms and conditions throughout the lifespan of your IVA. If you do decide to use credit cards, only ever use the cards when you are one hundred percent certain you’ll be able to pay the balance in full.

At the end of correctly managed and completed Individual Voluntary Arrangements , every debt they applied to is written off in full. You can be in a position to begin carefully gaining a better credit score and enjoy life without the worry of unmanageable debts. If you look at the longer-term picture, IVAs are designed to effectively end common problem debts one and for all, leaving you free to enter the next phase of life debt –free.