IVAs and Bad Credit

Is a bad credit rating preventing you from getting the finance you need? Are you struggling with high levels of unaffordable debt? If so, you may find that a debt solution, such as an Individual Voluntary Arrangement, could prove to be the debt solution that you are looking for. Of course, a debt solution should not be viewed as a means of further extending your already stretched finances as you will not be borrowing any further money but instead making your existing debt more affordable.

However, so much of the modern world relies on the availability of credit; be it in the form of an overdraft at the bank, the mortgage on your home, the hire-purchase agreement on your washing machine or your credit card, and it can be tempting to fight debt by getting yourself into further debt in the hope of consolidation these into one smaller payment. The key to the control of your personal finance could be in the professional management of these credit streams and you don’t need a debt consolidation loan to do this.

Help with this is available from a number of outlets, you have the option of talking to a specialist debt advisor at Harrington Brooks, which is one of the longest established financial practices in the UK. Their online Debt Wizard can give you an outline of the debt solutions that would best suit your financial circumstances. Obviously, no two people will be facing exactly the same economic situation. They will be able to offer you insights into a personal debt solution that will hopefully help you to avoid bankruptcy.

The Individual Voluntary Arrangement, or IVA, is proving to be a popular alternative to a declaration of insolvency. This is a formal agreement between you and your creditors and it was first set out in the 1986 Insolvency Act. Its popularity has increased significantly in recent years though, as individuals have started to recognise it as a viable and attractive alternative to bankruptcy. The procedure is handled by an Insolvency Practitioner who brokers an agreement between you and your creditors. It hinges on 75% of your creditors (in terms of debt value) agreeing to a repayment schedule that will have you pay off a proportion of your total debt over a given period, usually 60 months. After this time, any remaining debt is written off. The percentage afforded to your creditors is determined by the amount that you owe to each of them.

An Individual Voluntary Arrangement has a number of key benefits over a declaration of bankruptcy. Firstly, it allows you to avoid the stigma associated with bankruptcy as it is not publicised in newspapers. Also, although you may have to relinquish some of the equity in your home, you will be able to hang on to it. For further information, please contact Harrington Brooks who will see if you qualify for an IVA which can help manage personal loan debts, outstanding credit card balances and other forms of unsecured debt amounting to over £12,000.