Debt Advice – Choosing Between an IVA and DMP
Hard economical times around the world are causing people to be swallowed in debt. People are finding it more difficult to pay back loans or any other form of debt they are facing. There comes a time when the best solution is to seek debt advice from a professional to see what options are available. Seeking a debt management plan (DMP) or an individual voluntary arrangement (IVA) may be a suitable solution. Debt consolidation is becoming a popular way for people to free themselves of all the stress debt can cause. Each individual has different needs so in order to determine which of these may be better it is important to understand exactly what they are.
When seeking debt advice ask about an individual voluntary arrangement (IVA). An IVA is a formal agreement between the borrower and the lender, supported by the government. With the agreement, the borrower pays a lowered amount towards their debt until they eventually have paid off a certain percentage of the total debt. This program is for those that can prove that their living arrangements total more than their monthly income. In addition, the lenders must agree to the amount of repayment for this program. Interests are frozen so the payments never increase.
Another program one may want to query about when seeking debt advice is a debt management plan (DMP). A debt management plan is more flexible than an IVA. With choosing this program, the monthly payments can be lowered causing the debt to be repaid easier and accomplished at a quicker pace. A debt management company decides the payment amount at whatever is affordable for the individual. This solution is more flexible in that if something were to happen to hinder their finances, they can be re-evaluated by the company to accommodate what they can afford.
Each individual has a different amount of debt and has individual needs that affect IVA terms. In seeking debt advice, a person can lessen their stress by covering multiple debt payments with one set payment. In doing this they can lower the interest of the payments and lower the total debt in general. In most cases, debts can be completely eliminated in five years or even less. When looking for a debt management company make sure they are fully licensed and be sure to establish and understand any charges that will need to be paid by using their services. Get back on track and start working towards gaining financial freedom.
Simon Madden is a debt advisor who is currently exploring places to find debt advice.
Processing your request, Please wait....
