Debt Management or IVA?
Sometimes establishing which debt solution is the most suitable for you when trying to become debt free can be really difficult.
Both Debt Management and IVAs have their own advantages and dis-advantages, so making the choice as to which is most suitable is going to be down to your personal circumstances.
Debt Management Programs, or DMPs, are informal arrangements, which allow you to reduce your monthly payments to your debts. However, because a Debt Management Program is an informal agreement, your creditors will not have to accept your request to reduce your payments, and can therefore continue to charge you interest on the balance. This can significantly reduce the impact of your lower repayments, and have the effect of lengthening the time it will take to repay the original debt. A Debt Management Program will continue to run until the whole debt plus charges has been repaid.
An IVA is a formal arrangement, and therefore, when creditors agree to an IVA the agree to be bound by its terms for the full arrangement. This means that they can’t add extra interest, make charges against the accounts or try to take leagl action against you whilst the IVA is active. At the end of the IVA, which normally has a 5 years fixed term, the creditors will have to write-off all outstanding balances, thus leaving the debtor debt free, even though they may not have paid all of their debts back in full.
So to establish which of these two solutions would suit your personal circumstances best, why not contact My IVA Adviser and ask for a ‘ no obligation’ telephone consultation with one of our IVA specialists.
Call 0800 088 7503 and speak to one of our IVA advisers about which solution would suit your circumstances best, or leave your details at our quick contact form and we will get back to you.
Related Articles: