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Why Is The IVA Such A Sought-After Solution?

Todays Date: January 19, 2019

In 2009 going on 50,000 people entered into an IVA agreement, and many more beyond that figure looked for assistance and advice on IVA agreements and many are still doing so now. Why are so many people looking at an IVA company as the solution to their debt problems?

Of course those who are seeking advice pertaining to the IVA all share one thing in common; their finances are in an unhealthy state indeed. They consistently struggle with making monthly payments and whenever they seek an escape route, see nothing but a black gaping hole.

In the face of the economic climate, the last 18 months has seen an increase in those applying with debt solution programs. There was a significant rise in unemployment and those who managed to remain in employment were often faced with pay cuts. When income is decreased suddenly it raises a financial flag and is must be dealt with quickly and effectively as possible. It hardly comes as a surprise that the economic state of the country saw a rise in those turning to such programmes.

Prior to the IVA (and the more recent Debt Relief Order) those who simply could not repay their debts may have been forced into bankruptcy. The IVA is an alternative to that. Its appeal is that is helps you to negotiate your debt repayments to an affordable level without having to go bankrupt. Bankruptcy traditionally has something of a stigma attached and, given its very public nature, causes embarrassment many. An IVA often involves the interest being frozen, charges stopped and sometimes a reduction in the overall amount you owe, based on your income and cost of living. This is an obvious benefit to an indebted individual and the creditors see the plus side too. If an individual were to declare themselves bankrupt, the creditors would be unlikely to get any money back at all. At least through an IVA, they have a good chance of getting something.

Even though the recession has now formally ended, the effects it had are likely to last for some time yet and experts believe that the numbers of those taking out IVAs may be similar in 2010 to 2009.

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