IVA

An IVA is a legally binding agreement under which the creditors, to whom you owe the money, agree to a regular repayment plan so that you return to a healthy financial position in up to 5 years. An IVA stops any further interest charges and reduces your monthly repayments enabling more money in your wallet at the end of the month. It is a kind of insolvency that allows writing off debts while avoiding the stigma of bankruptcy. However, it reduces ability to borrow while in progress and affects credit rating for 6 years. 

The main purpose of an IVA is to offer debt help to avoid a great number of the financial restrictions that come with bankruptcy. So, if you are in business then unlike bankruptcy you can continue to run your business if it looks to be profitable concern in the future. An IVA works best for people who have a large amount of assets that need to be protected – an IVA allows you to retain all your reasonable assets like home which may not be possible in case of bankruptcy.

In the Red

Mr. and Mrs. John Wilson had a total debt of £28,000 on loans and credit cards. Their house was mortgaged. With minimum payments of £563 per month and a mortgage of £625 per month they were left with no money at the end of each month. Things went beyond control when Mr. Wilson missed on his mortgage payment some two months back. That is when they called RedHouse Debt for a free debt advice.

Suitable Debt Solution

Based on their current financial situation, RedHouse Debt advised them an IVA. The IVA made paying the mortgage a top priority and Mr. and Mrs. Wilson agreed to repayments of £300 per month. A proposal was drawn up and an application was made to the court for an Interim Order, which disallowed creditors to take any legal action against the Wilsons. For the IVA to be approved, a creditor meeting was arranged to vote either for or against the IVA arrangement. The IVA was approved after 75% (in value terms) voted ‘for’ the IVA arrangement. RedHouse Debt arranged this IVA within 5 weeks. The IVA stopped the debt collection calls and allowed Mr. and Mrs. Wilson to keep their house. In total, they will pay back £18,000 over 5 years in the IVA, writing off £10,000 of debt.

RedHouse Debt

There are a number of other debt solutions geared towards tacking the debt problems such as Debt Management Plan, Debt Consolidation Loans etc., but to know which one is best suited for your personal needs, contact RedHouse Debt. RedHouse Debt has helped thousands of UK citizens become debt free faster and lead a stress free life!!