Alternative debt solutions to an Individual Voluntary Arrangement

In suitable circumstances an IVA is a great debt solution. However as the Individual Voluntary Arrangement route has been marketed more, people are not so aware of other debt soution options. These options may fit their needs and circumstances more than an IVA. rnThe various avenues available can build more confusion and uncertainty for those who are in debt. Hence by just being aware of these additional options is not enough. Some of the essential facts and figures are looked at in this article that debt advisors look for when concluding the most appropriate debt resoution option for individuals. rnThe amount of unsecured debt a client is in matters to the debt advisor when determining which debt resoloution option the client should go for. Bank loans, store cards and credit cards are known as unsecured debts, while secured debts would be things like your mortgage or hire purchase on a car. Fiffteen thousand pounds is the lowest amount for an IVA which is quoted by IVA companies, more recently there are some companies that look at lower debt levels than £15,000 If your debt is below this amount, an appropriate option may be a debt relief order, a debt management plan or bankruptcy. Your assets are also important to debt advice professionals. Common examples of such assets maybe equity in your house or a vehicle of important value that is owned without finance owing on it. If your assets are of a value in excess of your unsecured debt it's likely that the Individual Voluntary Arrangement and debt relief order options will not be suitable or available, although some exceptions might exist. As bankruptcy will likely to threaten the assets themselves many people will observe other options such as selling the assets themselves or rescheduling repayments by the means of a debt management plan. Depending upon your circumstances you may also be able to look at the options of refinancing your assets to pay back your unsecured debts. Anyhow if your assets are less than your unsecured debts, an IVA is worth considering. It should also be in your knowledge that you may have to release some of this equity if they can for the creditors benefit. As long as the mortgage is paid on time along with the monthly IVA payments, the clients home will be safe. Your ability to pay towards your debt every month will also be assessed by the debt or IVA advisor. If however little or nothing can be paid, the possibility of bankruptcy or a debt relief order will be alerted to you. If it is temporary only a short while for not being able to make monthly payments, you are able to make "token payments" for a short while. rnIf the amount paid is substantial, creditors may not allow an IVA. This is because your debts can be repaid in a similar timescale to an Individual Voluntary Arrangement. In circumstances like this a debt management plan may help debts to be resheduled to enable affordably and completely repaying the debts within a realistic timescale. Where a reasonable monthly payment is affordable (a sum of £150 per month and upwards perhaps), you should look at how long a debt management plan would take to deal with the debts that you have. If it is excessive an IVA may portray an agreement that will allow your creditors to gain a part-settlement and allow you to get back on your financial feet within a few years. In these circumstances bankruptcy will also be an option for you which could potentially have a shorter payment term than an Individual voluntary arrangement. However homeowners and certain professionals may feel that an IVA offers them greater protections. Employment-type is a further important factor to be considered. Insolvency (a bankruptcy, IVA or DRO) might form serious issues for professionals such as accountants who rely on memberships of professional bodies. Members of the armed forces and police officers may have to adhere to strict procedures before committing to such options. Those who work in financial services or other positions involving large transactions or cash-handling ought to take care to check their employment agreement. Such possible restrictions do not commonly apply to informal debt management options.