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Sun 22nd Nov, 2009
Posted in IVAs at 10:10 am by Edward Woodwards
If your outstanding debts are up to 15000 or above, you must consider applying for an IVA, which stands for Individual Voluntary Arrangement. This is a very useful debt solution in times of economic crisis. It is a legal procedure, approved by the governments to avoid individual bankruptcy. Indeed, it is a difficult decision to apply for an IVA, but this is one of the reliable and convenient ways of getting rid of the loans.
There are a few conditions, which you must confirm before applying for an IVA. Firstly, you should be in paid employment, so that you shall be able to settle your debt in instalments within a specific period. Secondly, most of the IVA settlements are not meant for mortgages, and for secured loans. Thirdly, you should have at least two creditors.
The first step that should be taken for applying for an IVA is to get in touch with an IVA expert. This may be done by searching on the internet, or through the yellow pages. Once you have chosen the IVA expert of a reputable company, you are ready to go ahead. You would be given an application form to fill out all your personal and financial details.
The minimum amount that you can offer to the creditors is calculated after assessing your financial status with the help of the details in the form. You should mention an enough minimum amount for getting your application approved. The IVA expert will satisfy you with the procedure and will then prepare the statement of affairs and would send it to the IP or the company Insolvency Practitioner, who becomes a legal representative for your case to your creditors.
The IP drafts a formal written statement, or a proposal of your financial status, and your credit background. He indicates in his report that you have tried all other alternatives to pay off your debt, but IVA seems to be the last choice. You will be required to sign this statement, which would be witnessed by either a solicitor or a commission of oaths.
Your proposal would then be forwarded to the creditors. You might be asked for some modifications in your monthly payments. Once the proposal has been amended, the creditors might call for a meeting to vote for your case. Your proposal would get a legal status and the creditors would abide by it only if you mange to get 75 percent of the votes in your favour.
Information of the acceptance of your proposal would duly be sent to the court as well as your creditors. The IP would then become a supervisor of all the dealings between you and your creditors. You have to fulfil all the requirements of your creditors, for which you may even have to dispose off some of your assets. Your debt would be paid off in time if you regularly make your monthly payments.
IVAs have so far helped many individuals who were on the verge of bankruptcy, by giving them the legal advice and support that they desperately needed.
Edward Woodwards is a financial consultant. You can take iva help and solutions to debt problems. Find out more information at his recommended website http://www.iva.org.uk.
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Wed 14th Oct, 2009
Posted in IVAs at 8:38 am by Edward Woodwards
by Edward Woodwards
In the present day world, economic recession is on its rise. People are having a lot of financial issues. In such a situation, it is really impossible to carry out all the expenses of daily life. In order to achieve all the goals of their life, and to fulfil all the desires, people mostly get inclined towards loans. Thus, they are eventually caught in to the mess of debts.
If you are unable to pay off your debts, you will simply go for bankruptcy as your best available option. You can have a far better option as well if you really want to save your money. You can go for IVA that is also known as personal bankruptcy. It is called personal bankruptcy because it allows you to declare bankruptcy; however, it is not applicable in all situations. Those who want to keep away from bankruptcy must go for the option of IVA. It is a type of agreement which takes place between the debtor and the creditor. Moreover, it also takes in to account the financial issues and other problem of the debtor. Thus, relaxation is given to the debtor.
In order to decide from the two available options, that is, bankruptcy and IVA, you need to know the difference first. In case of bankruptcy, it is needed to sell out all your assets while in IVA there is no need of selling your home or car. Instead, you can enjoy all the luxuries of life and, at the same time, pay off your loans.
It is clear that the credit condition becomes zero when you declare yourself as bankrupt, and for having a new start, you need money, for which you have to again opt for loan. On the other hand, your assets are still with you once IVA is completed. Also, you can have a new start but without taking loans.
IVA is a flexible option as it gives you a lot of favours. In case of IVA, you have to hire an expert so that he carries out the procedures of IVA on your behalf. Moreover, it facilitates you to make adjustments in the terms of the agreement.
Since bankruptcy is announced in the newspapers, it remains like a stain throughout your life. Bankruptcy greatly decreases your career opportunities as nobody will tend to hire a person gone through bankruptcy. Moreover, you will not be allowed to set up any sort of business. Thus, personal bankruptcy affects your personal as well as career life. On the other hand, IVA remains confidential as it takes places between the debtor and the creditor alone.
The selection between these two options is based on the financial condition of the debtor. If he has no constant income, and also has to pay off a lot then he needs to go for bankruptcy. The one having regular earning source should avail IVA.
It is wise to consult an expert who can most probably tell you which option you should go for.
About the Author:
Edward Woodwards is a financial consultant. You can take
iva help and solutions to your debt problems. Find out more information at his recommended website
http://www.iva.org.uk.
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Fri 1st Aug, 2008
Posted in Bad Credit, Borrowing, Budgeting, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Financial products, IVAs, Missed payments, Personal debt, Personal loans, Secured loans, Spending, UK Finance, Unsecured loans at 10:35 am by Steve Smith
TDX Group, the organisation behind the Group Debt Index, claim that there has been a significant rise in the number of debt management plans taken out in recent months.
The Group claim that debt management, such as Individual Voluntary Agreements (IVAs) will rise by a further £5 million by Christmas, growing steadily by year end.
Mark Onyett, chief executive of the TDX Group said: “We’re already seeing far higher numbers of consumers struggling with personal debts and the pressure is set to intensify over the coming months.”
The research showed that an increasing number of people with financial problems are finding it difficult to make repayments on loan and credit card debts.
This accords with research showing the house repossessions are steadily climbing and a rise in people approaching debt charities for advice.
Since the start of the credit crunch many people have tightened their belts, but it simply isn’t enough.
Whilst most families are wise enough not to extend their credit with further personal loans, the increases in the cost of living has pushed many families deeply into debt.
Unfortunately, this Christmas could see many families hard pushed to pay their bills, let alone have the festive season of their dreams.
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Tue 15th Jul, 2008
Posted in Bad Credit, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt Consolidation, Debt management, Financial news, Homeowner Loans, IVAs, Insolvency, Missed payments, Personal debt, Personal loans, Secured loans, UK Finance, Unsecured loans at 12:44 pm by Steve Smith
The high levels of debt that Britons have built up over the past few years are finally coming back to haunt many households. The impact of the credit crunch is starting to take its toll on borrowers according to experts and it is expected that things are going to get much worse as the year progresses.
The accountancy firm KPMG has said that it is predicting that over 130,000 people are going to be declared bankrupt or enter into individual voluntary arrangements with their lenders. This will be up from the 109,615 who did the same last year.
When people enter into individual voluntary arrangements (IVA) they are allowed to restructure debts such as personal loans, credit cards and hire purchase so that their debts can become more manageable. Monthly repayments are made for a fixed period of time with the remainder of the debt being written off at the end of the period.
It is estimated that as many as 2,500 people have debt in excess of £100,000. In 2007 the average amount owed by individuals entering into IVAs was £50,300.
KPMG found that the average repayment for a loan on an IVA was 38% of debt. The average debtor repaid £19,000 of their debt and as a result £1.3bn had to be written off by creditors.
The high average level of debt indicates just how bad lending has been in the past few years. Most debtors owe so much that they have no realistic way of actually repaying their debt.
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Wed 4th Jun, 2008
Posted in Bad Credit, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Financial products, Homeowner Loans, IVAs, Insolvency, Missed payments, Personal debt, Personal loans, Secured loans, UK Finance, Unsecured loans at 12:46 pm by Steve Smith
It has been revealed that a rogue debt advisor company, unregulated by any watchdog, has begun to mail out leaflets to people in financial difficulty advising them to default on their loans. The company then offers to step in and help them to become bankrupt.
The company which is called the IVA Council (IVAC) is claiming that thousands of people in debt are each year being poorly advised on how to clear their debt. The IVAC also claims that thousand of indebted customers are being herded into formal debt agreements called Individual Voluntary Agreements (IVA) by creditors.
The company argues that these people should not end up living in poverty desperately trying to clear their debts but instead opt for bankruptcy. The debts could be on mortgages, personal loans, credit cards or utility bills, but the advice is the same each time: default.
The IVAC has mailed thousands of customers of debt advice services across the whole banking sector. The IVAC managed to get these details by buying them off the government-backed agency the Insolvency Service. This has prompted calls for the database to be made less readily available to the public.
Some recipients of these letters from the IVAC have complained that some sensitive information is clearly available in the display in the letter envelope.
IVAC has also set up a website that appears to be an almost exact copy of the Insolvency Service’s website. The company is also allegedly using an old logo of the Department of Trade and Industry (DTI) despite the fact that the DTI changed its name to the Department for Business Enterprise and Regulatory Reform last year.
The truth is that no one can escape their responsibilities and IVAs and bankruptcy are very serious measures that impact upon future credit for many years. They rarely mean that debts can be avoided. Instead the debtor is expected to repay loans and bills at an agreed rate, whilst living on the very same reduced income that this rogue company claims to help avoid.
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Mon 17th Mar, 2008
Posted in Bad Credit, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial products, Homeowner Loans, IVAs, Insolvency, Missed payments, Overdrafts, Personal debt, Personal loans, Secured loans, Spending, UK Finance, Unsecured loans, interest rates at 11:53 am by Steve Smith
If you find you are having difficulty in repaying your debt one option that is always open to you is to seek an individual voluntary agreement (IVA) from a specialist lender.
Under the terms of an IVA, if you own greater than £15,000 you can try and reach an agreement with your lender in which you only pay back a percentage of the loan or all of it, but the interest charges are frozen.
In the first 3 months of 2007, 11,300 Britons entered into such agreements with their lenders. That is a 50% rise one the same period in 2006 and goes to show how difficult many households are now finding it to deal with debts held in personal loans and credit cards.
However the problem is that now many lenders are taking an increasingly tough line on accepting IVAs. It used to be the case that many lenders would accept repayment on 25% of the loan or debt, however now that figure has gone up drastically and it is becoming increasingly difficult for many borrowers with severe debt problems to even repay their IVAs.
For example HSBC will now only accept an IVA if the borrower agrees to pay back a minimum of 40% of the loan while the student loan company will not allow their debt to be subject to any form of IVA or bankruptcy.
Northern Rock should use its own example when considering individuals in debt crisis. The crisis-hit bank rejects IVAs as standard practice. This is now becoming common practice from many lenders.
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Wed 8th Aug, 2007
Posted in Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, Financial products, Homeowner Loans, Homeowners, Housing news, IVAs, Missed payments, Personal debt, Personal loans, Property, Remortgaging, Secured loans, UK Finance, interest rates, mortgages at 12:38 pm by Steve Smith
Financial suicide is becoming a real risk for many homeowners as the interest rates continue to increase. Millions of homeowners will be hit hard after interest rates breach the 6% point anticipated by economists.
Soaring property prices have stretched people’s ability to step onto the property ladder. The added burden of increased interest rates and banks withdrawing affordable fixed rate products has made many people stop trying until the housing boom ends.
Ian Kernohan, economist at RLAM, said: “How far are the MPC prepared to go, bearing in mind the lags involved between raising rates and their effect on the economy? I expect one more rise will be enough and the risks to growth and interest rates next year remain to the downside.”
Twenty Five percent of UK mortgagers remain on their lenders’ Standard Variable Rate (SVR) while others have uncompetitive deals, according to Charcol.co.uk. Homeowners who took out a fixed rate a few years ago are also likely to be hit with unmanageable monthly loan repayments when they are forced to remortgage at the new higher rates.
Financial suicide can come quickly. For many, it will come when the interest rate increases above 6% and they continue to purchase a home, or try to apply for another secured loan, reducing their ability to make repayments.
Others are committing financial suicide by applying for IVAs.
Most suicide is committed when people try financial products they are unfamiliar with, or they follow the advice of a friend or colleague at work. This leaves them vulnerable and paying for financial services they do not need, forcing them into insolvency.
The most common way of committing financial suicide is accepting the first product offered. Shopping around can decrease the cost of a loan or mortgage by £100 or more a month.
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Wed 13th Jun, 2007
Posted in Bad Credit, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt Consolidation, Debt management, Financial news, IVAs, Insolvency, Missed payments, Personal debt, Personal loans, Spending, UK Finance, mortgages at 12:09 pm by Steve Smith
Credit Awareness week is the brain child of Credit Today magazine, Experian, the British Bankers Association, and the Consumer Credit Counselling Service. It has been brought about to highlight the fact that half of all adult Britons admit that they have made serious financial mistakes and have little or no financial control.
CreditExpert.co.uk reports that 80% of consumers regularly overspend without concern, and eventually, millions will face bankruptcy. Many people even understand that this is the direction they are heading, but do not take preventative measures.
Financial mistakes such as cheap consolidation loans with long payback periods that are thousands of pounds higher than needed, so you can take a vacation, or splurge a little, are at the heart of the problem.
Terms like “therapy spending” are some buzzwords these consumers use to justify their spending habits.
At least 5% of consumers are thinking about escape through individual voluntary agreement (IVA) or petitioning for bankruptcy.
Do it yourself debt management can compound the problem. One in 10 have used a credit card to pay off debt on another card. At least 10% of the people polled have missed repayments on credit cards, loans or mortgages.
Jim Hodgkins, managing director of CreditExpert.co.uk, said: “The number of people who admit to making basic financial mistakes and even considering quick fix solutions like taking out an IVA is worrying.
“What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit rating and ultimately impact on your financial future.”
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Tue 12th Jun, 2007
Posted in Bad Credit, Banking, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, IVAs, Insolvency, Personal debt, Personal loans, Secured loans, UK Finance, interest rates, mortgages at 10:11 am by Steve Smith
The experts predicted that insolvencies would rise to 30,000 in the first three months of 2007.
Britain’s consumer debt crisis statistics showed a near 50 per cent increase in the number of people taking out Individual Voluntary Arrangements (IVAs) in the first three months of 2007.
The total number of IVAs rose 47.6 per cent to 13,233 compared to 9,000 in the same period last year. Bankruptcies increased 10 per cent to 16,842. In Scotland, the number of individual insolvencies rose 12 per cent.
Politicians attacked Gordon Brown’s record and claimed that figures “tell us a lot about Gordon Brown’s poor management of Britain’s finances. An economy built on debt is not an economy built to last.”
The Liberal Democrat’s treasury spokesman, Vince Cable, added: “These figures equate to more than 300 people being declared insolvent every day – a truly astonishing number. But these are not freak figures. Sadly, they are likely to get even worse, especially with families feeling a further pinch on their budgets when interest rates almost certainly rise.”
Economists have predicted that repossessions will start to increase dramatically in the next few months, especially if the Bank of England continues to increase interest rates to the pessimistic 7% some economists claim. Already lenders are seeing a drop in the number of people applying for loans and other credit.
The increases in interest rates, and the finance companies elimination of affordable fixed rate plans, will make it more difficult for many consumers to repay their mortgages and secured loans.
Economists believe that the insolvencies will continue to rise, and might breach the 150,000 mark by the end of 2007.
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Thu 7th Jun, 2007
Posted in Bad Credit, Banking, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, IVAs, Insolvency, Personal debt, UK Finance at 12:16 pm by Steve Smith
A guide published with help from the Insolvency Service explains what an IVA is and the processes involved in setting one up. It also explores the long-term impact IVAs have on a consumer’s credit report.
Jill Stevens, Director of Consumer Affairs at Experian, said: “An IVA appears on your credit report for at least six years, so even after your IVA ends, typically after five years, you might continue to experience difficulties getting credit and other financial services because you entered into an IVA in the past. If you are granted credit, the chances are that the lender will see you as a very high-risk customer and will charge you a higher rate of interest as a result.
“While an IVA may be the best option for some people, it should only ever be considered after receiving impartial advice from a responsible organisation such as Citizens Advice, the Consumer Credit Counselling Service, National Debtline or the Insolvency Service.”
Joanna Elson, Chief Executive of the Money Advice Trust, commented: “IVAs are only appropriate for a small proportion of people and this route should only be entered into after receiving best advice from a reputable source. It is vital that people are fully advised on the costs and implications of entering into an IVA, particularly if there could be a risk to their mortgaged property.”
Martin Hagerty, Head of Retail Credit at HSBC Bank plc, commented: “HSBC has harboured concerns for some time about the level of potentially misleading advertising, encouraging borrowers to enter an IVA, when it may not be in their best interests. We fully support this Experian initiative and echo the advice for those with financial worries to take impartial advice or speak openly with their lenders as a first step. An IVA may work for some but can also have serious long-term implications for an individual’s credit rating.”
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