With a growing number of people in the United Kingdom suffering under debt there has never been a greater demand for both formal and informal debt management solutions.
UK residents have run up debt in excess of £8,000 per person and this is taking its toll on the economy with the GDP (gross domestic product) showing figures reflecting this hypothesis.
Many UK individuals are asking the following questions:
“How do I get on the government debt help scheme?”
“Is it possible to write off debt with a government scheme?”
And other questions relating to a “government debt scheme”
One solution in particular is what is known as the government supported IVA debt solution, otherwise known as the “government IVA” is a viable solution to help you become debt free over a period of five years.
So are these (Individual Voluntary Arrangements Government Issued?)
No, the term ‘government IVA’ simply refers to ‘IVA’ because it is sanctioned and supported by the government.
This does not mean the individual voluntary arrangement as a debt solution is provided by the government, it simply means it is approved by the government.
Can people receiving government benefits in the UK still qualify for an IVA?
Surprisingly yes, it is possible to get approved for this debt solution with a disposable income of approximately £80 per month.
Note to remember: The voluntary arrangement is made possible by legislation from 1986, it is not ran and operated by your local council, it is ran and operated by private debt management enterprise it is simply supported by legislation that comes from central government and parliament.
Should I Consider an IVA? What Are The Pros’ and Cons’
One of the first things people should consider is the good points and bad point of the individual voluntary arrangement before signing up to an agreement or even asking the insolvency practitioner to draft an IVA proposal (make sure to consider all the IVA pros and cons mentioned here).
It is IVA protocol to show commitment to the agreed debt repayment plan when entering into an IVA because if the terms of the arrangement are broken this could actually result in bankruptcy.
One of the main negatives or disadvantages of the IVA is the fact you are committed into the arrangement, as mentioned above. If you don’t like the idea of making a financial commitment in order to become debt free, if you would rather be laden with credit card debt, personal loan debt, payday loans debt and other types of unsecured liability then that is your decision however this can cause extensive long term issues and damage to your credit rating.
The advantages of the IVA when weighing the IVA pros’ and cons are many and varied.
Here are some of the main ‘pros’ of the IVA when getting out of debt:
You can freeze all interest and charges from your existing debts, this means your debts will not continue to get worse while you struggle to pay them off, this is a very powerful positive factor and a huge advantage for people trying to get themselves back out of debt to become debt free.
Also the creditors chasing you for debts have to leave you alone once you are enrolled on an IVA, this is because there are legal protections built into the arrangement which assigns you your own personal money manager (known as an insolvency practitioner) who acts as the point of contact for them instead of hassling you for debt repayment, if you are concerned with ‘pros of being on an IVA’ this is one remarkably helpful measure built into this debt solution which gives you the space to get out of debt.
Last but not least you can write off up to 85% of the total amount of debt on an individual voluntary arrangement, to say this is a huge advantage is an understatement, but think carefully before entering into an arrangement of this magnitude.