Individual Voluntary Arrangements - When Credit Card Debt Becomes too Much

In these days, everybody relies on credit to survive. Credit cards open up the world of online shopping, allowing people to shop around the world for anything they want. Stores are all too eager to give people high-interest credit cards, even if they have a less than stellar credit rating. With this increase in credit card use comes a significant increase in monthly household debt. Minimum payments seem small, but they do nothing to reduce the amount of the credit card balance. More and more people are finding themselves in desperate situations because of credit card debt, and they need help. For some, help may come in the form of an individual voluntary arrangement (IVA).

An IVA is a legally binding contract between you and your creditors that enables you to pay them at a rate you can afford, without having the payments eaten up by interest. To set up an IVA, you must enlist the help of an insolvency practitioner who will create a proposal that the creditors will have to agree to if they want to receive any money from you. All involved parties will agree upon an affordable monthly payment amount. You submit the payment to the supervisor each month for a set period of time, after which the total is divided among the creditors for final settlement of the debts.

Upon completion of the IVA, you will no longer owe the creditors any money, and they cannot pursue you for additional payments, even if they didn’t receive the total amount that was owed to them. Your credit rating will be negatively impacted for the next 6 years, but you’ll have peace of mind, knowing that your assets are safe and you can make a fresh start.