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Could An IVA Help If I Can Not Afford To Repay My Debt?

If you are struggling with your unsecured debt – if it takes an unmanageable level of debt that you can not afford to pay a reasonable time, but you can commit to making regular payments to reduce – You may be wondering. .. “Could an IVA (individual voluntary agreement) for help?”

How VAT works?

Before entering an IVA, you will need to discuss your situation with a debt counselor experts. If they are sure that the IVA is the best solution to your debt problems, you will work with a Conservative (IP) to prepare a proposal for VAT to be given to your creditors so they can see how you and your IP believes that IVA would work.

Your creditors will have the opportunity to vote on the terms of the proposal. VAT For starters, the vote of the creditors ‘clean’ (they) 75% or more of its debt accept the terms.

What happens then?

If the IVA is approved by creditors fairly, it will become legally binding. You start making regular monthly payments reduced to your IP, which will then share the money among your creditors according to how much money you owe them (known as a “pro rata” charge).

The payments are usually a total duration of five years, after which the remaining unsecured debt forgiveness, debt-free, leaving you legally (assuming you have fulfilled your part of the contract).

VAT – they have a downside?

As with any debt solution is an IVA also has its drawbacks. For example:

1. Enter the VAT will be recorded on your credit report, and will remain there for six years. This will affect the cost and / or the availability of credit at that time.

2. If you are a homeowner, you can sell part of their capital stock in the middle of last year’s tax. It ‘used to repay the debt more.

Be aware that you should always speak to a debt professional to discuss your situation and explore all possible alternatives before committing to any solution of the debt. This may be another solution of the debt such as debt management, is more appropriate for you.

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