When an individual is faced with a financial crisis you can be rest assured there are helpful alternatives to resolving financial matters.
In my opinion the most popular choices available are a DMP or an IVA.
Along with all choices they have pros and cons.
An IVA is an Individual Voluntary Arrangement also known as a formal insolvency.
The IVA program is legally binding and is an arrangement where the individual agrees to repay creditors according to the individual's ability to pay.
The process usually lasts 5 years and one must have accumulated debt of at least £15,000.
00.
IVA Advantages The advantages to selecting an IVA are: 1) The arrangement is legally binding and the creditors must abide by the IVA arrangement, as long as you have over 75% of the total debt value agreed by the creditors.
2) You should be able to keep your home although in some circumstances you may need to remortgage after 5 years 3) Creditors are not allowed to call the home or job looking for the debtor.
4) Credit interests and charges are frozen.
IVA Disadvantages The disadvantages for an IVA are: 1) The credit score is affected for up to 72 months after completion and may hinder in securing future credit during the time of the IVA.
2) An individual will have to live on a strict budget, as your disposable income is taken to pay off the debts.
3) In some cases selling the home may be necessary.
Debt Management Plan or a DMP is informal arrangement where contact is made with creditors on the individuals' behalf and mediates between the individual and creditors for a monthly payment plan.
Debt Management Plan Advantages are: 1) The service is not a legally binding service and one can opt out of the program.
2) The creditors agree along with the debtor on a monthly payment plan.
3) Your debts are reduced over time.
Debt Management Plan Disadvantages are: 1) The creditors may continue to raise the interest's rates.
2) The credit score will be affected.
3) The creditors may opt out of the program.
In my opinion the most popular choices available are a DMP or an IVA.
Along with all choices they have pros and cons.
An IVA is an Individual Voluntary Arrangement also known as a formal insolvency.
The IVA program is legally binding and is an arrangement where the individual agrees to repay creditors according to the individual's ability to pay.
The process usually lasts 5 years and one must have accumulated debt of at least £15,000.
00.
IVA Advantages The advantages to selecting an IVA are: 1) The arrangement is legally binding and the creditors must abide by the IVA arrangement, as long as you have over 75% of the total debt value agreed by the creditors.
2) You should be able to keep your home although in some circumstances you may need to remortgage after 5 years 3) Creditors are not allowed to call the home or job looking for the debtor.
4) Credit interests and charges are frozen.
IVA Disadvantages The disadvantages for an IVA are: 1) The credit score is affected for up to 72 months after completion and may hinder in securing future credit during the time of the IVA.
2) An individual will have to live on a strict budget, as your disposable income is taken to pay off the debts.
3) In some cases selling the home may be necessary.
Debt Management Plan or a DMP is informal arrangement where contact is made with creditors on the individuals' behalf and mediates between the individual and creditors for a monthly payment plan.
Debt Management Plan Advantages are: 1) The service is not a legally binding service and one can opt out of the program.
2) The creditors agree along with the debtor on a monthly payment plan.
3) Your debts are reduced over time.
Debt Management Plan Disadvantages are: 1) The creditors may continue to raise the interest's rates.
2) The credit score will be affected.
3) The creditors may opt out of the program.
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