Have you ever heard of an IVA? It’s known as an “individual voluntary agreement” that is enacted in the form of a legally binding contract signed by you and your creditors to pay off your existing debts at a manageable and fair monthly rate. You’ll agree to pay, and a person will divvy up the payment between your creditors on your behalf.
Typically, in an IVA situation, you work with someone called an “insolvency practitioner,” who work with you to understand your existing debts, your creditors, your assets, and your monthly income to set up a plan that is most feasible for you to achieve over time. Mortgages and secured loans aren’t typically included in an IVA, but consumer credit card debt is.
Essentially, an IVA is a step between you and bankruptcy, and is a worthwhile shot for someone with consistent income who needs help and a third party to stay on top of their debts and settle them in a timely fashion. An IVA is less than ideal for someone in the red who can’t seem to get their debts under control, either due to lack of reliable income or systemic factors that are hindering their payments.
IVAs are not a common debt management option, particularly for the average person with credit card debt. It tends to be a last resort before bankruptcy, and probably shouldn’t be your first choice of action for mild debt settlement. Want to know more about IVAs? Talk with someone at Cain & Daniels today.