Navigating your debt options can be quite the challenge. When you’re in a lot of debt it feels like you’re never going to get out. You might feel that your only option is to declare bankruptcy. However, bankruptcy is such a serious thing, so why take it lightly? Going through a bankruptcy is stressful and has many financial consequences. Also, the cost to file a bankruptcy is high enough to give you pause — is this really the right option for you?
You might be wondering about your options. Some people have even asked us “What is an IVA? — I heard about it from a friend, but I have no idea if it’ll work for me.”
The truth is that an IVA can work for a lot of people, especially when they have a sizable amount of debt to get rid of.
Here’s what you need to know. An IVA stands for Individual Voluntary Arrangement. It’s basically a big arrangement between you and your creditors. Your interest rates will be frozen and you will have one monthly payment to worry about. That’s a lot easier than trying to pay six or seven different monthly payments at the same time, and trying to remember when everything is due. That’s a great way to end up racking up late fees, since it’s really hard to keep track of so many “moving parts”, so to speak.
However, you will have to be cautious — the IVA can take 6-8 weeks to take effect, and you have to make sure that you are paying as much as you can based on your budget. You will need to also make sure that you pay on time. Missing payments will break the IVA, and your creditors have every right to come after you again.
The good news is that your home will be protected, and creditors can’t take you to court or try to bully you over the phone. This isn’t something that’s a “maybe” — if your IVA is approved, these are guaranteed benefits. It’s very important to make sure that you are at least going over this option with a qualified professional.
The best part of an IVA is that after 3-5 years of payments, the rest of your debts are wiped clean. On average people shave off 75% from their bills and begin rebuilding their credit a lot sooner than if they were to drag their feet and take no action. The choice is always yours, but hopefully you will take action towards a brighter future today!