When you find yourself knee-deep in debt, perhaps the first solution that you would come up with is filing for bankruptcy. Although this is a perfectly viable way out of your financial woes, you need to exhaust all the options that you have first before even considering filing for bankruptcy. This will stay on your credit record for up to ten years and will greatly affect your purchasing power as a consumer.
The good news is that there are other options that you can look at prior to filing for bankruptcy. One of these is applying for the Individual Voluntary Agreement which is a form of government debt help provided for residents of the United Kingdom.
Government Debt Help: What Is An IVA?
No matter which country it is that you live in, its economic status does not just depend on the prosperity of the business owners, but on the wealth of the private industry as well. If you have a bunch of citizens who are average earners and are struggling to pay off their debts, this can negatively impact the economy. Although there is no specific assistance that the government provides for individuals who have debts, the IVA is the closest thing to government debt help as you can get in the UK.
It was introduced in the UK in 1986 as a program which was only supposed to help those who are considering filing for bankruptcy. It was also meant to assist small business owners who incurred a certain amount of debt so that they can look at another alternative before even considering filing for bankruptcy. With the IVA, up to 75% of a borrower’s debt can be written off. The condition is that you need to have at least three creditors and fulfil other stated conditions as well. Depending on how much you owe, your debts can be paid off within a period of five years.
The nearest thing to an IVA in the US is debt settlement, where it is also possible to write off a portion of your debts.
How the IVA can Help You Out
If you are still wondering whether you should take advantage of IVA as a form of government debt help, take a look at the following list of its benefits:
IVAs can greatly reduce the amount of monthly payments that you need to make. Since the IVA is designed to help those who are considering filing for bankruptcy in the first place, you are given the privilege or option of paying back only what you can afford.
Once your IVA government debt help application is approved, you can become debt free within a period of 60 months. The agreement will also stop creditors from harassing you with collections calls, so you can get back on track with your finances. [Read more…]