Welcome to this introduction into the Individual Voluntary Arrangement process.
An IVA is a formal agreement in the United Kingdom between a debtor and their creditors where the debtor agrees to make a monthly payment to creditors over a period of 5 years. The creditor will, in return, offer a reduction of the debt to the person taking out the IVA.
Because IVAs are formal arrangements, you need a licensed Insolvency Practitioner or solicitor to draw up the agreement between the two parties.
Any reputable IVA provider will not charge upfront fees to speak to an Insolvency Practitioner. Some will not even charge for drawing up the proposal but most will factor in some payment but that amount they save you could be significantly more.
The other option is a debt consolidation loan.
There will be a number of factors to consider before you decide to apply for a debt consolidation loan.
You must remember that you are paying down your overall debt but you are still borrowing money to do that so make sure that you can afford the repayments each month. Many people think that a debt consolidation or IVA just means that they are now free from paying back their debt. That is not the case at all.
Another thing is that you’re going to have to look at changing your spending habits. You might be an over-spender or over-borrower, or you might just have a lack of discipline when it comes to your finances. Either way, you need to make some changes in the way you spend and live.