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Avoiding Bankruptcy : Debt Management Options

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by: No more debt !
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Word Count: 525
Date: Sun, 23 Oct 2011 Time: 7:11 PM
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Financial issues affect nearly everyone at some point in their lives. If you are one of the millions who have fallen victim to the lingering economic recession that has impacted the world for the last several years, you may be considering bankruptcy as the only solution for getting out of debt.  Bankruptcy can be a long, difficult and expensive process that can set you back financially far into your future. This does not have to be the only option, however.
Help for debt problems exist outside of declaring bankruptcy. One of the options that may prove extremely beneficial to anyone suffering financial problems but not wanting to do something as drastic as declaring bankruptcy is an IVA. This stands for Individual Voluntary Arrangement and has actually been an alternative to bankruptcy since 1986, though many haven't been aware of it until recently. With these arrangements you are able to completely avoid bankruptcy while still setting your finances straight with creditors by presenting your plan for repayment. These repayment plans generally stretch over a period of five years. An insolvency practicioner, or IP, acts as the intermediating party between the creditors and debtor to ensure that both sides can compromise on a repayment plan that will be mutually beneficial and acceptable.
Like any debt management plan, choosing an individual voluntary arrangement comes with pros and cons. Choosing whether this type of plan is right for you and your particular situation is something that must be completely up to you. You must weigh the benefits with the disadvantages and against all other options before making the final decision regarding your financial future.
The advantages of IVAs include legal, financial and personal issues. Unlike bankruptcy, this type of arrangement is not a legal agreement, so it will not be published in the newspaper, not recorded in public records and will not be placed on your credit report. IVAs will not damage your ability to apply for credit in the future. Because this is not made public, it will not affect your chances of acquiring certain professions, nor will it damage any new accounts that will not be included in the repayment plan. Once you have completed the repayment agreement, all debt is completely removed from record and you have a new financial beginning without any lingering effects.
On the other hand, IVAs do present some disadvantages. This option is generally only available to those with relatively large debts, as opposed to just a few financial set-backs. The repayment plan is also dependent on approval from the creditors, and, when approved, will require you to stay on a strict budget for the duration of your repayment period.
Despite the few disadvantages to this type of debt management, IVAs may be a great relief to those looking for a resolution to their financial difficulties but wish to avoid the hassle, stigma and further hardships presented by filing for bankruptcy. With the help of your IP you will have the opportunity to create a repayment plan based on your ability to repay and propose it to creditors so that you can both be satisfied.

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Hundreds of people from all walks of life contact us every day for advice and help for debt problems. Your personal debt advisor will provide a free consultation to determine the best solution to your debt problem. Whether that's an IVA or a Debt Management


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