Debt Reduction - IVAs

If you really want to get out of debt, you should strongly consider IVAs. An IVA is essentially a legal agreement that you and your creditors have. The IVA, or Individual Voluntary Agreement, has helped countless debtors avoid bankruptcy and ultimately enabled them to become debt free.

IVAs are typically supervised by Licensed Insolvency Practitioners (LIPs) - these are basically accountants who specialize in debt problem resolution. The LIP does not represent you or the creditor. Instead, they just supervise the agreement, making sure that the agreement works for both parties and that both parties live up to their obligations under the terms of the agreement.

The LIP is usually appointed by the court, since the IVA must be approved by a court of law. The IVA will include all debts that you have. Due to this fact and because of the massive debt reduction you will see, IVAs are an extremely viable alternative to bankruptcy.

An IVA will help you to reduce the amount you owe and then to spread that amount over a certain period of time so that you can more easily pay off your debts. One of the attractive features of an IVA is that it is completely private. The arrangement does not appear on your credit report. The only parties that are aware of the arrangement are you, the creditor or creditors that you have the agreement or agreements with, the court that approved the agreement and the LIP.

This means that your credit is not affected by the IVA and you will be able to obtain other credit, should you need to do so, even while the IVA is still in effect, as long as you are meeting the terms of the agreement. Although under the circumstances, it is probably better to avoid any further indebtedness if at all feasible.

Creditors are often open to IVAs as well. They have found that they can recover a great deal more of the debt than they would if you filed for bankruptcy - even though the debt is still greatly reduced.

IVAs help to reduce debt, but the debt is not reduced at the beginning of the IVA period. Instead, you make agreed upon monthly payments over a specified period of time, which could be anywhere from three to five years. If you make those payments on time, as agreed for the specified period of time, the remaining balance of the debt is written off and you are free of the debt. You can literally save up to 75% of the original debt!

One of the major disadvantages of an IVA is that if you fail to meet the terms of the agreement, you will be forced into bankruptcy and you could lose any assets that are part of the agreement, such as your home or your automobile. However, you also have the option of excluding these things from the agreement. The two biggest advantages of this approach are the high percentage of debt reduction enjoyed, as well as the avoidance of bankruptcy.

Overall IVAs can be a great solution to a difficult and unpleasant problem. However, they are not always easy to get. There are companies that specialize in IVAs and if you are interested in this course of action, you should contact such a company, ensuring that they are reputable by checking them out through the FTC and the Better Business Bureau in your area before you employ their services.