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Debt Plan Vs IVA
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Debt Management Vs IVA
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Debt Management Vs IVA
Are you are feeling the credit pinch?
Are your debts are spiralling out of control?
Don't know how you're going to deal with them?
Are you are feeling the credit pinch? Are your debts are spiralling out of control? Don't know how you're going to deal with them?
There are a few debt solutions available based on your financial situation, the 2 most common options available to become debt free are, Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs). We have put together a quick guide to both popular debt solutions:
Debt Management Plans Pros & Cons
A Debt Management Plan is an informal option to repay your debt at a rate you can afford. A debt Management Company will speak to all of your creditors and negotiate with them to reduce your monthly contractual payment, your monthly payment will be based on your disposable income.
Debt Management Pros
You will only make one monthly payment to cover all of your creditors
Your monthly payment will be lower and affordable
Your Interest and Charges may be stopped and Frozen
You will only make one monthly payment to cover all of your creditors Your monthly payment will be lower and affordable Your Interest and Charges may be stopped and Frozen Debt Management Cons
Your credit rating will be effected
Not all creditors may agree to freeze interest
You extend the time you spend in debt even further. even further.
Your credit rating will be effected Not all creditors may agree to freeze interest You extend the time you spend in debt even further. even further. IVA Pros and Cons
Unlike a debt management plan, an Individual Voluntary Arrangement (IVA) is a legal agreement between you and your creditors that will be monitored by an Insolvency Practitioner (IP), The term of an Individual Voluntary arrangement (IVA) is set, normally 60 months and at the end of the term you will be debt free and any debt not paid within the IVA will be written off. If you have a property with equity you may be asked to release this equity and pay it into the IVA.
IVA Pros
Your creditors write off some of the debt.
Interest and charges are frozen.
You might well be able to keep your house.
You don't face the stigma of becoming bankrupt, and you can keep your job if you're in a profession where you're not allowed to be bankrupt.
Your creditors write off some of the debt. Interest and charges are frozen. You might well be able to keep your house. You don't face the stigma of becoming bankrupt, and you can keep your job if you're in a profession where you're not allowed to be bankrupt. IVA Cons
After a year, you may have to remortgage in order to keep your house and pay off some of your debts.
You can't get significant unsecured credit.
Your credit rating is affected for six years, which means new mortgages will cost more and you might have to put down a larger deposit.
After a year, you may have to remortgage in order to keep your house and pay off some of your debts. You can't get significant unsecured credit. Your credit rating is affected for six years, which means new mortgages will cost more and you might have to put down a larger deposit.