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Personal Debt: Do You Need An IVA?


Personal debt is a growing problem in the UK – and many financial forecasters are predicting that things could get a whole lot worse especially with Brexit just around the corner. A report in the BBC News found that up to 8.3 million people in the UK are unable to pay off debts or household bills, according to a report from the National Audit Office (NAO).

Personal debt has grown, in part due to record-low interest levels. Those have meant low-cost loans, with many having availed of the opportunity for so-called ‘cheap money’.

For many, the day of reckoning has yet to come. For others, however, it has arrived or will do so in the very near future. The number of ‘hits’ on the Get Help With Debt website confirms the level of public anxiety surrounding the issue.

With so much uncertainty in regards to Brexit, a lot of UK citizens are keeping their fingers crossed that some of the warnings as to what may happen after Brexit fail to materialise. The truth is that no-one knows for sure at this stage. It is a ‘wait and see’ moment.

The likelihood is that personal debt will continue to be a significant problem in the UK, leading to an increase in the number of Individual Voluntary Arrangements (IVAs) between those entrapped and those to whom they owe money advanced as unsecured loans.

An IVA is a formal debt solution enabling a debtor to pay back what he or she owes on unsecured loans – personal loans, credit cards and overdrafts – over an agreed period. This requires acceptance by 75% of the creditors.

And while an IVA is the best solution in certain situations, there are others in which a different course of action would be more appropriate and beneficial.

Get Help With Debt’s team of experts, knows what works best for their clients. For that reason, we provide guidance best-suited to any given set of circumstances.

A typical IVA scenario is one in which money is owed to a number of creditors. That number may range from three to a dozen.

If those debts are insurmountable, or if it is unrealistic for that debtor to continue to service an unfeasible volume of debts while trying to provide for their family, an IVA may well be the best solution to that problem.

An IVA can be a lump-sum settlement. And typically an IVA runs for a five-year period.

To qualify for an IVA you must be completely unable to repay your unsecured debts in a reasonable time, but able to make consistent monthly repayments towards clearing them.

In negotiating an IVA, the whole premise is that it is both reasonable for you and affordable to you while acceptable to the creditors. But that means there is no wriggle room; it must be adhered to, without fail, from start to finish.

Provided the debtor keeps up his/her end of the bargain, creditors will do likewise. That means they will leave the debtor alone, so no more letters, phone calls or hassle.

And at the end of five years, provided the debtor has honoured the agreement, the creditors will write off any remaining debt. This can amount to a considerable percentage of the original debt.

Because they know the law inside out, Get Help With Debt’s highly qualified personnel are equipped to negotiate best-case solutions to your debt problems.

In any given situation, we know what will work and what will not. So if an IVA is not the best solution, we will examine the other options to find which one is.

1. We start by contacting all of a client’s creditors to point out that the current situation is unaffordable, providing proof of why that is so.

2. We will propose an interim arrangement to demonstrate a willingness to pay what is affordable.

3. The team will work on a more permanent solution – an IVA, a debt management plan or bankruptcy.

The bottom line is that creditors are realists who know that they cannot get money where there is none. That is why they are willing to work with people whose knowledge, ability and integrity as negotiators they respect.
If therefore, your case is presented by those your creditors recognise as being experts, it will be viewed much more favourably than would otherwise be true.

Fill out a form online and see if you qualify and we can book a FREE consultation to help with debt uk.