Alternatives to an Iva

An IVA is not the only option if you're struggling financially.

Here are some alternatives you may wish to consider:

Informal Agreement

An informal agreement can be arranged between you and your creditors if you feel like you are struggling to meet monthly repayments on your debts. This is set up without the involvement of a third party. As a result a more manageable budget for repayments may be possible.

Bankruptcy

Bankruptcy is an option that needs to be considered very seriously and thorough advice should be obtained from bankruptcy experts before making any decisions. Essentially,  going bankrupt will mean you will completely be rid of your debts. However this option has serious implications. For example, it could mean there is a big possibility you could lose your home or any other assets. Furthermore, bankruptcy is published in the 'London Gazette' as well as local newspapers where you live. Bankruptcy may affect any professional status; you cannot work in the financial services or be a director of a company.

Debt Management Scheme

A Debt Management Scheme is not a legally binding option and is set up by a third party between you and your creditors. It involves a negotiation where debt repayments are evaluated according to what you can actually afford to pay back. The interest on your debts may be frozen but this is up to the creditor and as the terms are not legally binding, it may change within the duration of the scheme. There is no fixed time scale for a Debt Management Scheme as it depends on how long it takes you to pay off your debts.

Debt Consolidation Loan

A consolidation loan can be taken out in order to pay off all your existing unsecured debts (e.g. credit cards). It may mean stress levels are reduced as you will not have to worry about paying numerous creditors. Consolidation loans may be taken out against a property and over a long period of time so it is vital to keep up with repayments and not risk losing your home. (This avenue is only suitable for you if you have a relatively low level of debt.)