Are you one of many Brits who are facing serious debt problems? The current economic crisis has taking its toll. So who is really to blame. Has the recession had its effects on you and your finances.The real question is, Where can you find the right advice that will help you to get rid of debt.

Perhaps you are one of many alongside the 90,000 and increasing number of people who are thinking about entering an IVA

Before you do please consider a number of things;

1) The company you appoint to assist you, ensure they are a uk registered company with all the right licenses. Its imperative you do not fall prey into the hands of an inexperienced start up bedroom company that does not even posses a data protection license. As you can imagine there is a lot of sensitive information that you will be giving out.

2) Do not be pressured into doing anything without being 100% sure. This might sound obvious but you will be surprised at the amount of people that jump into something that they later regret. You will be entering a legally abiding agreement. More or less a contract. So when making your decision.Take enough time to think it through.

3) Watch out for high start up fees. Although many companies do obtain a start up fee to cover the cost of setting up the IVA. Some companies fees might be too excessive. A point to remember is if your first payment for the IVA is even higher than what you have been struggling to pay on a monthly basis. Let your alarm bells ring.

4) Ask for paperwork first. Once again this might sound very obvious but ensure to request for the paperwork and read the small print. This way you will avoid any nasty surprises.

The next step, Lets evaluate an IVA

What Is An IVA

An IVA is a legally binding agreement between yourself and the creditors. This agreement states that you will make monthly payments based on your disposable income for the next 5 years. (so what you can afford basically)The remainder of your debt will be written off by your creditors. During this time your creditors will stop contacting you.

How An IVA Came About

The IVA stands for Individual Voluntary Arrangement. They were introduced in the 1980`s after the last recession. During that time. Many people were struggling with their repayments and as a result the creditors were filling for bankruptcy. This had a negative effect on the economy so the Government stepped in to offer a middle ground in the form of an IVA.

The IVA offers a solution for struggling with debts. It allows you to restructure your payments to an affordable level and helps you to avoid bankruptcy.

How An IVA Works

All of your unsecured debt is brought together so you just have one payment that you can afford. This payment will be paid to creditors over 5 years with any of the remaining debt being written off. Once the IVA has been approved at a meeting of creditors they cannot go go through the courts to obtain their money and all interest and charges will be frozen. You wil never payback more than what you owe. An IVA is a form of insolvency, which means you cannot apply for any unsecured credit whilst you are on it and once the IVA is complete it will stay on your file for a further 12 months after it has finished.

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