One of the most important Debt management Programs available in the UK or to UK residents is IVA.
An IVA is basically an individual voluntary agreement and is a Debt management Program that individuals can enter into so as to manage and eventually pay off their debts.
IVA programs are provided for in UK laws, under the Insolvency Act of 1997. The law allows individuals owing debts over 15000 pounds to more than one creditor to enter into a managed debt repayment program that is affordable and manageable, especially to the debtor.
To qualify for this program, the above mentioned conditions will need to be met. The borrower or debtor will also need to prove or demonstrate financial hardship and be able to afford a minimum monthly payment of at least 150 pounds towards the consolidated debt.
The IVA will be drafted by a debt management firm that will also consolidate the debts owed by the borrower. Once drafted, the agreement has to be approved by an insolvency practitioner and also acceptable to the creditors.
As soon as it is signed, it needs to be adhered to so as to remain valid. The borrower will need to make the required payment, usually a significantly lower amount. All interest charges and penalties imposed by the creditors will cease immediately.
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