IVA Articles
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IVA : Learning To Live Without Credit.
Many people who enter into Individual Voluntary Arrangements (IVAs) will at first find it difficult to cope with the idea of not having the 'comfort' of being able to use credit on the occasions when their money runs out at the end of the month.
This is hardly suprising when you consider that having the facility of credit has, in many instances, taken the person to the position of having to seek debt advice in the first place.
People can fall into debt for many reasons, but most people find themselves living in 'continual' debt, and using their credit cards to the 'max', by the time they are at the 'asking for help' stage.
Indeed, the thought of having no credit available at all for the 5 years of an Individual Voluntary Arrangement (IVA) may seem impossible to achieve, but this is where the skill of the Individual Voluntary Arrangement (IVA) specialist comes in. The essence of an Individual Voluntary Arrangement (IVA) is to allow the debtor to pay what is considered an affordable amount each month, whilst removing the need to 'lean on' any credit facility. This monthly figure is arrived at by way of a careful consultation undertaken by an Individual Voluntary Arrangement (IVA) specialist, during which every aspect of the persons income and expenditure is recorded. Allowances are made for all expenses that are incurred during the month, but the costs of debt repayments to credit cards and loans, etc are removed.
Because the cost of supporting the old credit is removed, the need for future credit is removed.
Take this link if you would like further information on IVA: How much will my monthly repayment be?
For the Individual Voluntary Arrangement (IVA) to be a success, the person must agree not to obtain any credit for the duration of the Individual Voluntary Arrangement (IVA), which is usually 5 years.
This may seem quite a daunting prospect initially, but without the burden of 'historic debt' taking money out of the household budget, the debtor will adapt to living within their new budget quite quickly.
In fact, many people who successfully complete their Individual Voluntary Arrangement (IVA) choose not to entertain taking further credit out, for a long time.
And here's the hidden benefit:
At the end of the Individual Voluntary Arrangement (IVA), the debtor will have paid back all their debts and will no longer have to make their contributions into their Individual Voluntary Arrangement (IVA). In the majority of cases, the person will now have the amount they were paying into their Individual Voluntary Arrangement (IVA), usually in excess of £300 per month, re-introduced into their household budget and will have this extra money available to spend on whatever they wish.
If you would like to discuss your circumstances with a specialist Individual Voluntary Arrangement (IVA) adviser, call myIVA-Adviser.com for free on 0800 088 7503 anytime.
