Individual Voluntary Arrangements are popularly known as IVAs and have gained popularity among all the legal debt solutions in recent times, as many consumers have unfortunately faced considerably more difficult financial circumstances. As things stood at November 2010, figures from UK charity Credit Action showed that throughout every working day, 1,000 more people sought to enter formal debt solutions and there was 1 person declared bankrupt or insolvent every 52 seconds. Since an IVA is not the only legal debt option possible in more recent years, this article highlights some of the key reasons for their popularity with consumers needing to end problem debts.

1.   Addressing multiple debt problems
   

IVAs are usually applied to debts owed to 3 or more creditors. This is useful for those who found themselves increasingly reliant on lines of credit but were later finding all the repayments unmanageable for a variety reasons.

2.  Addressing more severe debt problems.
   

Acceptance criteria would typically be debts amounting to £15,000 or more. One good example of times they can be particularly helpful might be for higher levels of debt in combination with an unexpected redundancy.

3.  Credit card debts
   

Many consumers can find their credit card debts are attracting high interest rates, against which the long term financial aspects of IVAs can be particularly appropriate. Fresh interest and charges become frozen, especially helpful for those consumers who had only been managing to repay minimum amounts without reducing the actual debts.

4.  No professional restrictions
   

For both work and self-employment, Individual Voluntary Arrangements do not involve the professional restrictions imposed by bankruptcy. They can present a way to gain financial ‘breathing space’ without interference to your working life.

5.  They create manageable plans in the face of ever-mounting debts
   

Problem debts may feel somewhat daunting to begin to tackle. IVAs often allow consumers feel they regain more control by effectively stopping creditor demands and fresh court action. They may also allow for a viable alternative to bankruptcy in some cases.

6.  Debts are not allowed to increase
   

Once Individual Voluntary Arrangements are formally begun, further interest and charges become ‘frozen’.

7.  They provide a known date for a debt free future
   

Providing you remain within your IVA terms and conditions of an IVA, they write off the debts they covered at the end.

8.  Helping to restore quality of life
   

IVAs replace constant repayment demands, with a relatively flexible option which takes individual circumstances into account. With a manageable repayment plan agreed, life can regain its normality. Supportive advice is available to help you budget for special occasions without undue strain and you can enjoy life without the stress of unmanaged debts.

9.   You shouldn’t pay up front fees
   

The more professional companies simply incorporate their competitive arrangement fees into the monthly instalments, so you needn’t feel under any strain to find up front fees at a time when you might be feeling least able to.

10.  Paying ‘with plastic’
    

Although you are not able to use credit or store cards, prepaid cards can help you keep manage your finances whilst giving you all the benefits of paying by card.

Individual Voluntary Arrangements cannot be applied to every case, so it is vital to gain independent expert advice for your unique situation about all the aspects of an IVA. As well as IVAs, more legal options include Debt Management Plans, informal debt management arrangements and sometimes bankruptcy is chosen in a limited number of situations. You are strongly advised to seek advice from impartial debt help experts before committing to any one solution.