Most of us have debts and it can get overwhelming and stressful. If we do not address the situation wisely, we will find it very difficult to repay the debts, and this may even lead to some financial disasters. Therefore we all need to know how to deal with them without being stressed out and should try to figure out the best solution to repay the amount that we owe. So, if you are struggling to pay your debt, maybe it’s time to apply for Individual Voluntary Arrangement (IVA).
What is IVA? If you are struggling to repay your debts, then IVA may be the way for you to get out of all your debt problems. It is a lifesaving agreement between a debtor and a creditor to pay back the debt partly or fully over a time period. In this agreement, the debtor only needs to pay back the amount that they can afford, thus making it a more affordable and realistic debt management plan.
It is an invaluable debt management plan, which will free you from the overwhelming feeling of answering your door and opening threatening letters and sometimes even some court actions. If you are still wondering why you should apply for an IVA, you can look into this guide and understand its various benefits.
You only have to pay what you can afford
When you apply for an IVA, you will have to work with an Insolvency Practitioner who will talk with your creditors and negotiate with them. They will access your finances and will figure out what you can afford. Then they will make a realistic offer to your creditors that is affordable. Usually, with the help of IVA, you will be paying an amount that is lower than your debts. But still, this amount will be higher than what you pay if you file bankruptcy.
You need to consult your insolvency practitioner if they think that IVA is the right choice, and then they will help you draft a proposal. This proposal will consist of a reasonable and realistic amount that is beneficial for both the debtor and the creditor. These practitioners will be experienced and will be working with creditors every day, making them familiar with proposals that have the chance of getting accepted.
Efficient management of monthly repayment
IVA is one of the most realistic and affordable debt management solutions out there. The debtor will have to pay a fixed amount monthly that is calculated based on their monthly expenses and financial obligation in that particular phase of their life. The practitioners will calculate how much amount you can afford in a month, making it possible to repay all your debts along with fulfilling all your financial responsibilities. During this course of IVA, if your financial circumstances change, then the rate you have to pay will also change. If your financial stand becomes well, you will have to pay more, but if your financial position becomes poor, you will have to pay less amount.
Creditors won’t be able to contact you
What makes debt issues more stressful is being chased by creditors and the painful taunts or threats you have to hear. But once you enter IVA, neither the creditors can contact you nor they can demand payment from you. They also cannot take legal action against you, thus protecting you from creditors in all ways.
Interests and other debt charges will be freeze
One of the main reasons for many of the debtors to find repayment overwhelming is mainly because their monthly income is only enough to repay to cover the interest of the debt. Since the principal amount never goes down, the debtors will never be able to clear their debts. Along with this, they will also have to pay for late payments, making the repayment process extremely stressful. But when you apply for IVA, all the charges and interest will be frozen, thus stopping the debts from going up.
You will have an end at sight
IVA is an agreement that will be set for a fixed time, usually from 5 to six years. During this period, you will have to pay your debt monthly and follow the agreement’s terms. But once you get a clean chit from IVA, you will be free from all your unsecured debts.
So, if your debts are making you stressed and anxious, contact Insolvency practitioners and consider applying for an IVA.
Source: Plato Data Intelligence: Platodata.ai