Debts Relief
A good debts relief is the individual voluntary debts relief programme introduced by the Government in 1986 to help people who owe more than £15,000. The IVA is in effect for a five year period. The IVA is a contractual arrangement between the consumer and their creditors, and it allows any debt remaining after five years to be written off. This means the consumer is debt free if they honored the agreement. It is a popular debts relief programme.
The IVA is not too good to be true. The IVA is a debts solution backed by the Government, and it is a real win-win for the consumer and the creditors. The consumer does not even have to pay any fees. Insolvency practitioners manage this debt reliefs programme and their fees are not paid by the consumer. The fees are factored into the payments the consumer pays to the creditor, but the consumer’s debt is still reduced by the total payments agreed and made under an IVA.
The IVA has important advantages with one advantage being the consumer can keep their house. This debts relief programme often requires the release of some or all of the home equity. An insolvency practitioner can give advice on the amount of equity and when it would need to be released.
Some advantages of this debts relief are: 1) Once the IVA is agreed, creditors by law can no longer demand payments by telephone or letter; 2) Legal action against the consumer is not allowed; 3) Interest and late charges cannot be added; The credit rating will not be as badly damaged as if the consumer was bankrupted; 4) The credit rating will begin to improve once the debts relief programme has been completed as agreed; and 5) The IVA is a private arrangement.
All creditors must be included and credit will not be obtainable during the period of the IVA.
The IVA debts relief arrangements are managed by insolvency practitioners who are trained to manage the IVA and they are held to a strict code of professional conduct.
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