Will an IVA Destroy My Credit Rating?

Will an IVA Destroy My Credit Rating?


There are individuals who face the issue of debt problems to such a great extent that they are compelled to apply for an IVA. Therefore, if you have a significant debt problem that you feel you do not have the capability to deal with, a debt amounts to over £15,000, you are eligible to commence or file for a legal process for your assistance. This is known as IVA (Individual Voluntary Agreement).

IVA indicates that the debtor’s creditors shall be willing enough to reduce the amount of the total debt and in turn, an offer of reduced repayment would be settled to get over the problem of debt. Therefore, by entering into an IVA, the total amount of debt repayment that includes the costs as well can assist you in clearing your debts in around 60 months.

Moreover, payment is usually accustomed to be made over a relaxing period of five years, after which the remainder of the debt is written off. However, during the repayment period, all the interest and additional charges are frozen or eliminated and the creditors are not in a position to correspond or make an effort to harass the debtor.

The account is administered and managed by a fully equipped and qualified, licensed insolvency practitioner who undertakes the responsibility of coordinating with your creditors and distributing funds on your behalf.

The company is in a position to perform a completely private view of your circumstances to see if you are eligible and deserving enough to have the consolidation sanctioned. Also, on arrangement, the creditors are ready to submit a reductive offer regarding the repayment in full and final settlement of the debt.

The debt writes off is applied only where an Individual Voluntary Arrangement is suited and deserved. That it would adhere to and at the end of 60 months as well. This is related to the unsecured debts that are usually included in an IVA and exclude all the other secured debts, mortgages, and HP or utility bills. If any individual fails to meet up with the terms of IVA, he would have to face bankruptcy.

Moreover, the most important factor of all is that an IVA shall affect your credit rating for almost 72 months even after the IVA is completed. The fee that you would have paid is deducted out of your monthly income and the one that you contribute to IVA. This shall be notified in advance, all those people who are in possession of their homes, are required to re-mortgage after 3 years. There are alternative solutions as well such as debt management that may be availed as well.

Moreover, if you want to take hold of a consolidation plan, it shall immensely help in reducing and the high interest rates. There are debts assistant that help in the financial bleeding caused by the damage to credit rating and arrange a path to get back in a direction that would raise your credit score overtime.

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