Family Debt – Can an IVA Help

Family Debt – Can an IVA Help

Depending on your circumstances an IVA may be the key to resolving family debt problems. Your debts can be brought under control without borrowing more.

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How an IVA can resolve Family Debt problems

A seemingly never ending spiral of debt can put a terrible strain on your relationship and family. Borrowing more very often makes matters worse. The solution many people choose is therefore an IVA.

This Arrangement reduces your unsecured debt repayments to an affordable monthly amount. Once it starts you should always have sufficient cash for your monthly household bills and the things your family needs.

If you and your partner both have debts it is possible to carry out a joint IVA. This covers everything you owe on an unsecured basis including payday loans and even benefits arrears.

An IVA is a serious commitment. It normally lasts for 5-6 years. However after this time outstanding debt is written off giving your family a fresh start.

Can an IVA protect your Family Home?

An IVA gives your family home legal protection. Once the Arrangement is in place it prevents any of your creditors trying to secure their debt against it with a Charging Order.

In addition it will help you pay your mortgage on time. The cash you need to do this is always provided for in your living expenses budget. If you are in arrears you can include an allowance to start to clear these.

However as a home owner the Arrangement will require you to try and increase to amount you repay towards your debts by releasing equity from your property. If this is not possible your payments could be extended by 12 months.

If you are renting your landlord will not be told about your IVA. As long as you maintain your rent payments your home will not be affected.

Will an IVA protect your Family from Debt Collectors?

An IVA gives you personal legal protection from your creditors. Once it is in place they must stop hassling you and disrupting your family life. The phone calls and letters demanding payment and threatening legal action will stop.

In addition any CCJ (County Court Judgment) or Attachment of Earnings already in place is overturned. If any sums are currently being deducted from your wages these will also cease.

You will no longer have to be concerned about Bailiffs coming to your property. This will not be allowed to happen. If a Bailiff has already been to your home their actions must stop.

If a Charging Order has already been placed against your property it cannot be overturned with an IVA. The debt is now secured and cannot be included in the Arrangement.

How much does it cost to start an IVA?

There no upfront costs to start an IVA. The company you use should not ask you to pay anything until the Arrangement is in place. This makes it a really accessible option for people already struggling to pay family debt.

Once it is accepted fees are chargeable by your Insolvency Practitioner (IP). However these are taken directly from your monthly payments. You do not have to pay any extra to cover them.

There is no set monthly payment you must be able to afford to start an IVA. You will have to pay as much as you can based on your disposable income. Having said that the minimum payment required is normally £80-£100 a month.

If you are unable to pay at least £80-100/mth towards your debts an IVA may not be for you. Speak to us for more advice about your options.

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