Consumer debt is a terrible thing, and when it gets particularly bad, many people end up filing bankruptcy because they can see no other way to end the situation. UK residents are fortunate in having the option of an IVA to use if their debt situation is very serious. This was designed as an alternative to bankruptcy, and is a way of writing off a large part of your debt without the drastic consequences of becoming bankrupt. The nearest equivalent to an IVA in the US is debt settlement, which is also a way of eliminating a portion of your debt and making it more possible to repay the rest. Even if you have a good understanding of what an IVA is, you will naturally want to make sure you find the best IVA company to work with. This is a very important point because there are a huge number of debt management companies in the UK and they are unfortunately not all entirely honest. When you approach an IVA company you need to know that the advice you will get is based on telling you what course of action is going to actually deal with your situation most effectively and get you out of debt the fastest. What you have to avoid, therefore, are companies who will simply advise you to do whatever they can charge large fees for, rather than what will work best for you.
This article will give you the information you require to be able to sift through and find the best IVA company for you. You must first of all understand what an IVA is and how it works, so that you know what you ought to expect from a good IVA company. You need to understand that an IVA is different to a debt management plan, because it is a formal and legally binding arrangement. Your creditors do not have to agree to a debt management plan if they do not want to, but with an IVA, if you can get the creditors for at least 75% of the value of the debt to sign up for it, the other creditors have no choice but to be part of it. This can be a big advantage if you have a creditor who is not willing to co-operate with your attempts to deal with the debt in this way.
One of the main advantages of an IVA is that after a fixed period, usually of up to five years, your remaining debts are written off. This can mean getting rid of up to 75% of your debts at a stroke, if you make sure you use the best IVA company. Something else to bear in mind is that IVAs are not the best solution for everyone. They are still a serious step and should only be used for very bad debt situations. You will normally have to have at least £10,000 worth of debt to be able to set up an IVA. If your debts are smaller, or your income more substantial, a debt management plan may be a more appropriate option.
Provided you approach only the best companies, their analysis of your situation will tell you whether an IVA is right for you, or whether you should go with a debt management plan. The best companies will offer both. If you are a UK resident and you think an IVA may be the answer to your problems, you should only approach companies that are very well established and can demonstrate a history of having provided the right solutions for hundreds of other people before you.
The best approach is to avoid new companies as they are an unknown quantity. The safest starting point is to follow recommendations for a few of the most reputable IVA providers, and apply to a few of them. This will allow you to compare what they offer you so that you can then choose who you think is the best IVA company, from a group which are all safe and effective.
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