Individual Voluntary Arrangements or in short (IVAs) have been established since 1986 but increased financial awareness and the growing debt problem have led to an explosion in their use in the last few years. This agreement is a halfway measure, which allow people to address their debts without declaring themselves bankrupt or financially collapsed. These agreements are effectively a legal binding deal between a debtor and creditors where the debts are frozen and current repayments scrapped in favour of a more manageable sum.
Bankruptcy is an ideal option for people with no assets and no income who cannot pay their debts. The IVAs are appropriate for those who have borrowed over their income and can’t meet their repayments but have an income and want to continue making payments to eventually become debt free. A typical IVA loan help will lead to the creditors agree to write off a proportion of the debt owed to them. In return the borrower agrees to pay a fixed proportion of their monthly income towards the debt for a time period of five years. IVA loan help has lesser restrictions than formal bankruptcy and allow the borrower to start borrowing money again straight away on the assumption that they can find a lender prepared to deal with them.
But despite the easier terms, financial experts believe the explosive growth in the uptake of Individual Voluntary Arrangements is more to do with financial awareness than careful consumer choice. In some adverse financial cases bankruptcy is the most appropriate option but people aren’t generally encouraged to go bankrupt and show financially wretched. But they are encouraged to go down the IVA route and their financial adversities are not made public. The reason IVAs are so popular is because they are being extremely well marketed by the insolvency practitioners. There are a number of companies available to offer IVA loan help.
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