An individual voluntary agreement allows someone to pay back only a portion of their debt, as long as they agree to make payments on it within a specified time period.
Taking an individual voluntary agreement can sometimes be preferable to using a debt consolidation loan, paying it back alone or filing bankruptcy. By learning the ins and outs of an individual voluntary agreement, you can understand if it is right for you.
Never use an individual voluntary agreement if you can pay back the debt by making some simple lifestyle changes. Using an IVA will lower your credit rating, marking you as a bad investment. This is because you will be basically cutting the profit margin of any creditor who agrees to the IVA. It is a good idea, however, if the debt you owe back is starting to snowball out of control. It may be quicker and cost less money in interest than a debt consolidation loan, and will mark your credit rating much less than filing bankruptcy.
Agreeing to an individual voluntary agreement can be a great way to settle unsettled debts. It puts a handle on the situation where only you can agree to the repayment terms.
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