What is an IVA?

IVA Alternatives

Peace of Mind

People in financial difficulty often experience the following:

• Anxiety attacks
• Insomnia
• Depression
• Breakdown in communication with family members
• Relationship problems
• Stress brought about by debt collectors phoning and mailing payment demands
• Lack of concentration
• Problems at work

The FIRST thing to do if you are feeling depressed or are experiencing anxiety attacks is consult your doctor. Your GP will be able to suggest suitable treatments. Nothing is more important than your health, both for you and for your nearest and dearest.

Once you are feeling better, there are a number of effective ways of resolving your debt problems:

A CONSOLIDATION LOAN enables you to roll all your outstanding credit card debts into a single loan with a preferential interest rate. If the monthly payment is one you can afford, taking into account your mortgage and any other secured debts, this may be the right option for you.

RE-MORTGAGING YOUR HOME is another option if you have enough equity in your home to cover the debts that you owe. Your home is safe so long as you can meet repayments in the future. We would recommend that you consult an Independent Financial Advisor before taking this step.

A DEBT MANAGEMENT PLAN enables you to repay all of your credit card debts, but over a longer time period and is likely to incur additional interest charges. This could be the answer for you, though you need to check which of your creditors will be prepared to stop charging interest, rather than merely deferring interest for a limited period. It won't stop letters and phone calls from debt collection agencies. And it won't stop creditors seeking charging orders on any property you have, obtaining County Court Judgments or attachment of earnings orders.

An INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA) is a binding agreement between you and your creditors in which you agree to make manageable payments every month, usually over a period of five years, after which you will be debt free. If you own your home, you will need to pay a percentage of the equity (calculated at today's values) into the arrangement. The payment plan will be based on what you can afford to pay each month, so it usually means a substantial portion of your debts are written off. In terms of peace of mind, one benefit of an IVA is that it is the Supervisor's duty to deal with creditors so you won't be plagued by phone calls and letters from debt collection agencies. You also know precisely what your payment obligations will be for the five year life of the IVA.

Filing for BANKRUPTCY is a big decision but, once taken, can help some people draw a line under their debt and start afresh. The bankruptcy period usually lasts for one year and could affect your future employment choices. It also requires a notice to be published in your local newspaper and in a publication called the London Gazette.