My Debt Relief Plan

IVA Questions

Why have I not heard of IVA’s?

With the increasing debt situation in the UK, IVAs have caught the public and media attention. Over 40,000 people enter IVAs each year. IVAs are a highly regarded, ethical and moral way to deal with debt problems whilst avoiding bankruptcy.

Who can enter into an IVA?

Insolvent individuals who cannot pay their debts can apply for an IVA as long as their disposable income is over 200. However if their income is primarily made up of benefits it is unlikely that the IVA application will be accepted.

What if my creditors don’t agree?

If 75% of your creditors are in favour of your IVA proposal it will be approved. If it is approved the other 25% of your creditors will be legally bound to the arrangement as well. During the negotiations creditors can suggest modifications to the proposal and you can choose whether to accept them or not.

What if my creditors aren’t all in favour?

If your creditors don’t all vote in favour you still have the option of bankruptcy or an informal arrangement with your creditors.

Will my credit rating be affected?

If you undertake an IVA, you will have to give up all your current credit (e.g. credit cards and store cards) and you will not be allowed to take additional unsecured borrowings until your IVA is completed. However you will be allowed to use pre paid cards.

The bottom line is that undertaking and IVA does not mean that you are “Blacklisted” for ever. Once it is complete your credit rating should repair fairly quickly.

How will an IVA affect my current credit?

Your current credit (e.g. credit cards and store cards) will be inactive and you will not be allowed to take additional unsecured borrowings until your IVA is completed. In fact, it is possible to take or change a mortgage even while you are still within an IVA but you will need to make sure you get the advice of your Insolvency Practitioner for this.

Will my home be safe?

When you are in an IVA you won’t usually have to sell your property. However you may be required to release equity by taking out a remortgage in the last year.

Who pays the IVA fees?

The creditor pays the IP to manage the IVA on their behalf. During the course of the IVA your contributions will go towards a creditor pot. The money in the pot will be handed over to the creditors at yearly intervals, and at the end of the 5 year term all outstanding debts are written off. This pot is looked after by the IP. Once the IVA has started this pot does not belong to the debtor but to the creditor. IP fees are agreed to and paid for by the creditor out of this pot.

Should I pay no-win, no-fee upfront fees?

IVA proposals are tricky to put together and can sometimes be 15 pages long. It is therefore important that the proposal is as accurate as possible both to ensure that it is passed and that you are able to meet your monthly commitments. Poorly constructed IVAs can result in bankruptcy as the debtor may fail to make the agreed contributions. Therefore paying a no-win,no-fee upfront fee can be a way of ensuring your details are as accurate as possible and that you get the best possible customer service. Obviously you should shop around and talk to at least 3 companies before making a decision.

How much will I have to pay Into my arrangement?

This figure will depend on your personal circumstances and will be agreed between you, the IP and your creditors. Normally the monthly payment will not be below 200.

Simon is a dedicated Debt Management specialist, with over 5 years experience.

Add comment May 31st, 2008

Should You Apply For a Government Debt Relief Grant?

Are you completely engulfed in debt? For many Americans, living in debt is a way of life. You can dread hearing the telephone ring because you know it is creditors on the other line, looking for money that you just don’t have. You might have such limited funds that you aren’t able to enjoy life at all, from rationing what you have just to pay the monthly bills that continue to pile up on you while you try to pay off your debt to taking odd jobs to make more money. In this article, we will explore whether you should apply for a government debt relief grant as a way to get out of the debt that you seem to be drowning in. There are a few questions you should ask yourself to determine whether you should apply for a government grant for debt relief.

Do You See a Way Out of Your Debt?

Doing what you’re doing right now to pay off your debt, do you see a way out? Is there a specified date for when you will be out of debt if you continue making the payments you’re able to make? If you just don’t see a way out of your debt, applying for a government debt relief grant might be the answer to your problems. Because the government sets aside a certain amount of money each year to help specifically with problems like this, you may be eligible to receive money that will help you see that light at the end of the tunnel.

Can You Afford to Pay Back a Loan?

Many people take out loans in order to pay off their debts. They see the advantages as having only one bill to pay rather than several and the possibility of getting a decreased interest rate with the loan. However, the truth is that when you take a loan out for your debt, you’re only exchanging one debt for another. If you don’t think you could afford to pay back a loan, a government grant for debt relief may be what you need. This is because a grant is money that you don’t have to pay back. So, you could pay off your debt and have a chance to start over and make things work.

Are You More In Debt Than You’ve Ever Been?

Sometimes, individuals can get so far in debt that they will never be able to pay it all off. With the amount of interest that you’re paying on each debt, how long will it take you to pay off your debt? If you are afraid that your debt will continue to be a burden, even after you’re gone, a government grant for debt relief might be just the answer you need. You can eliminate your debt and be sure that you will never be a burden on someone else.

Using the information and questions above, you can determine whether applying for a government grant for debt relief will help you.

If you’re currently drowning in debt and are seeking a way out http://www.debtreliefgrants.org can help! Learn proven tips and tricks to become more prosperous and take control of your financial health. Visit http://www.debtreliefgrants.org today!

Add comment May 31st, 2008