In 2009 going on 50,000 people entered into an IVA agreement, and many more beyond that figure looked for assistance and advice on IVA agreements and many are still doing so now. Why are so many people looking at an IVA company as the solution to their debt problems?
Well, the first thing to bear in mind is that the only people seeking IVA advice are those in dire financial straits. These are people who frequently find they cannot make their monthly repayments on their debts and are struggling to find a way out.
There has been a massive rise in recent times in people who are undertaking formal debt restructuring plans, and the main reason for this is due to the recession over the last couple of years. There have been massive rates of unemployment and in that time many people who have kept their jobs have had to take pay drops to continue in them. A surprise drop in wages is always going to cause problems especially if you have debts to pay off. This makes it no real surprise that there has been a massive increase in those who have looked for formal debt help.
In a bygone era of debt solution, preceding the IVA and now The Debt Relief Order, those experiencing financial hardship beyond repair were forced into resorting to bankruptcy. The IVA is a viable solution for those wishing to ethically handle and confront their debt situation by negotiating affordable and realistic repayments. Bankruptcy has always been seen as a label to be avoided at, excuse the pun, all costs. An IVA often sees interest being frozen, charges stopped and can result in your overall debt being reduced based on your personal financial factors i.e. your overall debt, income and personal expenditure. It is also, perhaps surprisingly, a positive step in the eyes of the creditors. They would likely received nothing at all if the individual declared themself bankrupt but with the IVA, they have a chance of redeeming at least part of the debt.
Even though the recession has now formally ended, the effects it had are likely to last for some time yet and experts believe that the numbers of those taking out IVAs may be similar in 2010 to 2009.
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