Credit Crunch Solutions

Modern living standards are rising rapidly, leading to a rising demand for money. People need money to maintain their social standing while meeting their daily needs and necessities. They also need money to ensure they have a comfortable living environment. Increasing numbers of people are obtaining loans to meet their financial requirements. Finance may be obtained for any purpose such as home improvements, marriage, hire purchase, higher education, business or property investments.

There are times, however, when obtaining financial assistance from financial institutions becomes harder, or more complicated. Such scenarios are referred to as a credit crunch, when financial assistance is not easy to obtain. When a credit crunch takes place in a market, those loans that are available may carry high interest rates and the lenders may restrict their lending criteria. The worst feature of exaggerated interest is that it can worsen the financial situation of the person seeking help. In such cases, effective credit crunch solutions are sought that can help people to solve their financial problems easily and effectively without actually adding more to their debts.

If you are one of those people who want financial assistance but are unable to obtain finance because of the credit crunch, help is available. One credit crunch solution is the Individual Voluntary Arrangement, or IVA. An IVA can help you to manage your finances and debts in a structured, time-limited fashion.

To take advantage of an IVA, you need to meet certain acceptance criteria, typically being debts of more than £18,000 over 3+ creditors, with a regular monthly income. An IVA cannot be managed by an individual; instead, a licensed insolvency practitioner is appointed who will manage your case from start to finish, handling all of the correspondence with your creditors.

If an IVA is accepted by 75% (by value) of your creditors, your appointed insolvency practitioner becomes responsible for collection of your monthly payments and the distribution of payments to your creditors. In an IVA, you only make payments to your IVA provider and your creditors are not permitted to chase you for any additional payment outside the IVA.

At the end of the IVA, any unpaid debt is written off and you can look forward to a life free from the burden of unsecured debt. An IVA usually lasts for five years, although this may vary depending on your circumstances.