Individual voluntary arrangement (IVA) debt is a type of debt that is becoming increasingly common in the UK. An IVA is a legal agreement between you and your creditors to pay off your debt over a fixed period, usually 5 years.
If you are struggling to make your monthly payments, you may be considering an IVA. However, there are several things you should consider before you make this decision. This article will provide you with everything you need to know about IVA debt and ways to quickly get out of it.
Pros and Cons of an IVA
Pros: –
- You only have to make one monthly payment that is affordable for you.
- Your creditors cannot take legal action against you or chase you for payment while you are on an IVA.
- Any remaining debt (after the agreement period) is written off.
- You do not have to sell your assets, such as your house or car.
- You will have a clear plan to repay your debt without the stress of multiple payments.
Cons: –
- Your credit rating will be affected, which could make it difficult to obtain credit in the future.
- An IVA is a formal agreement that involves a licensed insolvency practitioner, and the fees for arranging this can be high.
- You will have to stick to a strict budget during the agreement period.
- Your income and expenses will be reviewed annually, which can cause additional stress.
How to Quickly Get Out of IVA Debt
- Consider debt consolidation – If you have multiple debts on top of your IVA debt, consolidating them into one payment may help you manage your finances more easily. Debt consolidation companies can help to reduce your monthly payment, making it more affordable for you.
- Increase your income – Consider taking on extra work or selling unwanted items to increase your income. This can help you to pay off your IVA more quickly.
- Negotiate a settlement – If you are in a position to make a lump sum payment, you could negotiate a settlement with your creditors. This means you can pay off your debt in one go, potentially reducing the total amount you owe.
- Seek professional advice – It is important to seek advice from a licensed insolvency practitioner who can help you to decide the best course of action for your situation.
Conclusion
An IVA can be an effective way to manage your debt if you are struggling to make monthly payments. However, it is crucial to weigh up the pros and cons before making a decision. If you are already in an IVA and want to get out of debt as quickly as possible, there are several strategies you can use to achieve this. Always seek professional advice before taking any action.
