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Is An IVA One Of The Debt Solutions For You?
If you are on the verge of bankruptcy but are afraid of the long term implications that this will carry, an IVA may be one of the perfect debt solutions for you.
An IVA is set up by a debt management company who will assign you to an insolvency practitioner to work out an agreeable monthly arrangement for your creditors. Unlike bankruptcy, an IVA is kept very private and therefore, no-one need ever know of your financial difficulties. Another bonus is that you can still continue to trade. An IVA will also save you money as administration costs are considerably cheaper than with bankruptcy, thus allowing more of your money to be distributed amongst your varying creditors. Your insolvency practitioner will ensure that any interest and credit charges are frozen, which will allow you to make manageable, affordable sums for an agreed period of time, normally five years.
Normally, you would be in serious debt to be able to apply for an IVA and you must owe money to more than one company. On top of this, at least 75% of your creditors must agree to the arrangement. By taking out an IVA, the debt management company will collect your payments and distribute them among your creditors. After five years, and upon successful completion of your agreed monthly payments, all of your remaining outstanding credit will be dissolved.
An IVA will be recorded on your credit file and will remain viewable for six years. When your IVA has ran its course, it may be a little difficult for you to start regaining credit, but once you started lending and repaying small sums, your credit rating will soon start looking healthy again. An IVA is an ideal way to stop creditors from sending you threatening legal letters; it will remove all CCJs and leave you free to rebuild your reputation. Most IVA companies are paid by taking a percentage of your monthly fees but do check with each individual organisation as some charge upfront fees.
Other useful links:
Debt Free Direct are leading debt experts with an
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