| Released by: Myvesta UK |
| Web Site: http://myvesta.org.uk/programmes/myvesta_iva.html |
Article discussing debt strategies comparing the IVA to Debt Management
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Email: info@myvesta.org.uk |
| Keywords: IVA , Individual Voluntary Arrangement |
| Update Date: 8/15/2006 12:03:29 PM |
| Hits: 370 |
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Descrption:
There are many advantages of the Individual Voluntary Arrangement overthe informal debt management plan. Essentially, the IVA represents a binding agreement on creditors once the IVA proposal has been accepted.
The main benefits of this are the fact that creditors are not able to 'change thier minds' regarding the terms of the IVA and they are also bound to freeze all interest and other costs associated with the credit facility.
Other benefits are the fact that creditors are not allowed to make contact with the debtor throughout the duration ot the IVA term and for many individuals this serves to remove a great deal of stress and pressure as they may well have been dealing with creditor collection calls and correpondence for a period of time before the IVA had been out in place.
These factors offer a real advantage to debtors when compared with the lack of control that informal debt management plans offer indebted individuals.
The terms offerd via a debt management plan fundamently are completely controlled by the creditors and they are under no obligation to offer debtors any interest reduction concessions or relief from debt collecting tactics. Indeed it is quite common for an individual to enter into a debt management plan administered by a debt management organisation only to see balances increase and offers of repayment refused.
In addition to this debt management plans do not offer any element of debt write off by creditors and so the individual is expected to repay the entire amount of outstanding debt over a longer period of time than the original credit agreements due to the reduced payments that will be being made to the accounts.
This is one of the reasons why many individuals choose to opt for the IVA strategy if possible as it offers a definative debt resolution period along with firm boundaries within which the IVA terms are set.
IVAs are also administered by highly regulated and licensed Insolvency Practitioners. This is not the case with debt management plans that can be administered by unqualified individuals and organisations. |
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