• Have you been advised to or considered clearing your personal debt with an IVA?
• An IVA could be the solution you have been looking for to help you become clear of debt.
• It has a fixed term of repayment, so you know exactly when it will end, however, conditions do apply!

Could an IVA be what you need to clear your debt?

When an individuals personal debts have become such a problem that they feel they can no longer manage the monthly repayments, there is a debt settlement solution called an Individual Voluntary Arrangement or IVA which can give people in debt the help to clear debt that they require.

An Individual Voluntary Arrangement or IVA is a formal procedure set up by a licensed professional, where an arrangement is made between you and all of your creditors to make reduced payments towards the total amount of your debt, in an effort to pay off part of what you owe then normally after five years of making these payments your debts are classed as settled.

• PLEASE REMEMBER AN IVA IS A LEGALLY BINDING AGREEMENT!
• An IVA usually lasts for 5 years or 60 months, creditor contact usually stops and interest and charges are usually frozen.
• You may be required to release equity from any home you may own towards the end of an IVA in order to increase the total contribution your creditors would receive.

After it has been agreed that an IVA is the best option for you, you will be asked some questions about your current financial situation to try and work out an amount that you will be able to repay each month for the term of the IVA.

Once this figure has been agreed by you, an application will then be made to the court for an ‘Interim Order’ and once  this is in place no creditors can instigate legal proceedings against you. There will then be a meeting of all your creditors which you would be wise to attend. Once the majority of the creditors agree that an IVA should be put in place, that’s it.

• Your financial situation will be reviewed during the course  of your IVA!

An Individual Voluntary Arrangement or IVA should not be confused with other informal debt management procedures as it is legally binding and you are tied into to it for five years normally.

If you are not sure that an Individual Voluntary Arrangement or IVA is the answer for you to clear your debts you contact a trained consultant for further IVA help or advice to help you decide if an Individual Voluntary Arrangement or IVA is for you.

Trust Deed in Scotland

• In Scotland there is no such thing as an Individual Voluntary Arrangement or IVA.
• In Scotland it is known as a Protected Trust Deed and does effectively the same job.
• With a Trust Deed you can;

1. Stop and prevent interest and charges
2. Make one simple monthly payment
3. Put a halt to creditors calls and letters
4. Stop court proceedings or Bankruptcy

If you think your personal debt situation warrants considering an IVA or Trust Deed, call us to get detailed IVA or Trust Deed facts and figures based on your current situation and obtain further information about debt help in general.

An Individual Voluntary Arrangement or IVA is not the solution for everyone and it should be carefully considered before proceeding. Your credit rating will be affected due to the formal nature of the IVA.

• You can obtain further information about an IVA if you call us free on from a land line using 0800 018 6868 and we will gladly discuss your situation and give you the very best help with debt problems and IVA advice we can in the strictest of confidence.

With unemployment currently rising from 2.46 million in the UK, people are increasingly finding that the fact that they found another job shortly after losing the first is not always the end solution. The problem is that when they were going through the period of unemployment, they were set back financially to a point that they cannot recover.

The credit agreements they have fall into arrears and there is little or no chance of earning enough money to catch up, savings have also usually been diminished and this is when the individual starts to seek a personal debt solution such as an IVA or Individual Voluntary Arrangement.

Hard times are ahead for the UK consumer and people need a solution to clear personal debts that they can trust. The IVA or Individual Voluntary Arrangement is a UK government approved scheme that is legally binding between the individual who has the debts and the creditors who have leant the money.

• The IVA usually runs for 5 years (60 months) and has an exact end date.
• Creditors will be expected to stop further interest and charges being applied to the credit accounts whilst the IVA is in place.
• Any money left to pay the creditors at the end of the IVA process will be written off.
• In certain circumstances where the individual is a home owner with equity in their home, they will be expected to release some of this equity in years 3-5 of the IVA agreement. This increases the overall contribution back to the respective creditor.

With the rising cost of living on the horizon, household expenditure in the UK is going to be stretched and only those who plan correctly and take advice when required will survive financial turmoil.

If unemployed, one needs to cut costs and be pro active in finding work, downgrade personal expectations in the current economic climate and accept an income that will provide a living.

People in the UK should now start to gear their lives to living without credit, we have been conditioned as a society to use credit and live by using it. The only people who will succeed in the future financially are those who will reduce their need for credit to a basic level.

If you have been considering a debt solution such as an IVA or Individual Voluntary Arrangement, you will be familiar with an alternative personal debt solution called a debt management plan. It is important to be aware that a debt management plan is NOT legally binding and does NOT have an exact end date.

Some companies will claim they can write off all your debts, you should be very careful of these claims, only certain amounts of debt can be written off under an IVA agreement and a voluntary petition or creditors’ petition for bankruptcy is the only process that would usually write off 100% of any persons’ unsecured debt.

When you enter into an IVA or Individual Voluntary Arrangement, your IVA is managed by an Insolvency Practitioner and this person is legally responsible for proposing the case to your creditors and administering the IVA process on your behalf. An IVA or Individual Voluntary Arrangement should not be entered into without much consideration.

You are at risk of being petitioned for bankruptcy by your creditors should your IVA fail. An IVA can fail for many different reasons and the main one usually is due to the client no longer being able to afford the agreed monthly repayment. In this situation, the Insolvency Practitioner will re assess your income and expenditure and offer advice accordingly of what the best route forward for you would be.

• A great number of people do successfully complete IVAs’ and are then confident that they chose the best solution to clear their debts.
• To qualify for an IVA an individual would have approximately £25000 of unsecured debts and be able to contribute a disposable income repayment of around £250 per calendar month.

Not all situations require an IVA and you should not enter into an IVA or Individual Voluntary Arrangement without much prior consideration. For further advice regarding personal debt issues please call our free from a landline personal debt helpline using 0800 018 6868, lines are open 24 hours a day and your call is free.

For most people that live in Scotland, the differences between debt solutions that are available in England compared to those in Scotland can be some what confusing to say the least.  If you have previously taken advice from debt agencies and are still struggling to understand the various options available to clear your debts as a Scottish resident, please read this blog post further as we believe this will help you.

• Trust Deed

Most people are now familiar with the term IVA (Individual Voluntary Arrangement), for those that are not, it is a legal agreement between you and your creditors in England ONLY, and is a form of Insolvency that allows you to pay back an amount of the money you owe within a set or fixed period of time, usually 60 months or 5 years.  The remainder of what you owe that has not been repaid is then written off by your creditors leaving you debt free.

• The Trust Deed, is very simply the Scottish alternative to the IVA in England.  The difference is that in Scotland, the Trust Deed lasts for 36 months, not 60 months like an IVA in England.

Creditors are not duty bound to agree to Trust Deeds as they do need to make sure that they are obtaining a satisfactory percentage of the total debt to be repaid.  This is not always possible when the clients circumstances are investigated as the client sometimes does not have enough disposable income (the money left over after essential bills and living costs) each month to meet the financial repayments, in this case the client can then consider a debt management plan or Bankruptcy.

• YOU SHOULD NOT APPLY FOR ANY FURTHER CREDIT ONCE ACCEPTED ONTO A TRUST DEED!

A Trustee will manage your Protected Trust Deed for you and Trust Deeds can only become protected if certain requirements are met by the individual, if the Trust Deed becomes protected, your creditors cannot take legal action against you and the interest or charges on your personal debt will become frozen.

You will NOT be charged to enter a Trust Deed arrangement, your creditors are responsible for paying your Trustee out of the contributions you make whilst the agreement is in place.

• Bankruptcy in Scotland is sometimes referred to by some as Sequestration

Sequestration involves removing or seizing a persons belongings or assets, to a value of the debt owed with a view to being of financial benefit to the creditor owed the money or in some cases this can be for monies owed to the Scottish state.

Laws in Scotland that appertain to personal debt and finance agreements can vary based on what type of agreement you have signed and with which company or lender.  For an exact definition of different legal agreements, you should without question consider speaking with a Scottish Insolvency Practitioner or solicitor.

The above is a very basic explanation designed to give you a brief outline of the differences between, debt help in Scotland and that to the rest of the UK.  For a more detailed explanation you can contact our personal debt helpline which is open 24 hours a day.