The insolvency act 1986 wrote legislation into law which enabled people in debt to write off the majority portion of their personal debt after after a period of reduced monthly repayments enabling people to systematically write off their debts while making repayment contributions.
The Debt Solution: IVA (Individual Voluntary Arrangement)
A new debt solution came out as a result of this new act written into law, (the insolvency act) which helped bring the IVA into being as it was established there was a need for a financial solution for people who had substantial personal debts, to help them write off the debt but also to make life easier in the short term by making living more affordable, and freeing up their finances to pay the highest priority debts, such as mortgage payments, court costs, income tax debt and other debts which are urgent.
Key Benefits Of The IVA:
Write Off Debt: The IVA can enable the individual in debt to write off an enormous portion of their debt (up to 90%), this is after the 5 year period of reduced debt repayment is finished.
Reduced Debt Repayments: The monthly contributions towards repayments are restructured to make sure the monthly repayments are affordable for the person in debt, and that it is viable for them to make these payments.
Bailiffs And Lenders Not Able To Chase, Contact Or Continue Legal Action: Due to what is known as an ‘interim order’ (which is a legal injunction to protect the individual from creditor hassle and other nuisance contact) from lenders to chase debt repayments.
Frozen Interest And Charges: During the course of an IVA all interest and charges of unsecured personal debts are frozen, meaning the debts are not able to grow out of control while they are being addressed by the debtor.
Most Types Of Debts Eligible: Most unsecured debts are eligible for an IVA, apart from certain types of secured debt and mortgage debt cannot be put in an IVA, the IVA is designed as a way to make people manage unsecured debts and other financing, certain debts are not eligible, such as money owed to the crown, or income tax and court costs and fines
Backed By The Government: Government legislation (mentioned above) sanctions Individual Voluntary Arrangements (IVA’s), making the IVA possible through Government and judicial recognition and legal court approval, this gives the IVA the powers to protect people from lenders and bailiffs and also implement a structure which prevents the harassment of people in debt.
Where You Should Go If You Would Like To Find Out More
There are a number of different companies out there to recommend for IVA’s and other debt management solutions like the DMP (Debt management plan), one new and emerging company based in Bolton, greater manchester is First Debt Advice, which is a company offering a range of debt solutions to help people avoid bankruptcy and become debt free over time.