In recent years in the UK the number of people starting an IVA, an individual voluntary arrangement, has almost doubled. This is in part due to the credit crunch and higher housing prices. Higher value mortgages are having to be taken out for people to get onto the housing ladder. In many cases individuals have stretched themselves financially in order to get their first home which has meant any changes in their financial situations leaves them more prone to debt problems.
An IVA is part of the 1986 insolvency act and was brought about to help citizens of England, Wales and Northern Ireland faced with substantial debt. This new law was introduced to help people who would have otherwise been faced with bankruptcy and the associated social and financial stigma associated with being bankrupt. It essentially gave people with massive financial debts a second chance.
If you feel you are in a position of needing to seek IVA advice you need to contact a UK insolvency practitioner. They will be able to advise you if your circumstances qualify you to implement an IVA. There are certain IVA criteria you have to meet. Every year tens of thousands of IVA applications are made.
Attaining an IVA means that you will have all your unsecured debts grouped into a single payment and used to pay all your creditors. Your new single monthly payment will be at a level you can afford and will usually last for 5 years. During this period any interest charges and other charges will be stopped so your debt does not accumulate.
As long as you keep to your agreement, the contract between you and your creditors then you will not be hassled by phone or post for payments and any legal action against you will cease. After the full term of the IVA expires then your remaining debt will be written off assuming you stick to the terms of the agreement.