A nation’s economy is only as wealthy as its citizens. But what if you have a bunch of people who are average earners, a major percentage of which are struggling to pay off their debts? Is there any form of government debt management help offered to individuals whose debts seem to be more than their finances can actually handle?
In the United Kingdom, the closest thing that you can get to government debt management is the IVA or the Individual Voluntary Arrangement. Introduced in 1986, the IVA was supposed to be an alternative to those who are this close to filing for bankruptcy.
The UK government initially meant for the IVA to be a financial option that will help small business owners get out of their debts. However, years passed and the IVA was modified in such a way that it is now a widely-used government debt solution in the UK.
If you want your local economy to be given a boost, you naturally would not want people or individual business owners to go bankrupt. To prevent bankruptcies from happening, what the government did was introduce the IVA as a way of writing off up to 75% of your debt.
If you owe a certain amount to at least three creditors, then you may qualify for this type of government debt management. Another qualification is that you should have a regular income which leaves you with enough funds to make regular payments for your debts.
Whether you’re a small business owner or an employee who simply needs some financial assistance to get out of your debts, should you seriously consider the IVA as an option? The answer is most definitely yes, provided your situation is serious and you take proper advice from a specialist debt company.
As mentioned earlier, the IVA is a better alternative to filing for bankruptcy – although it does have some disadvantages as well.
For one, the IVA will negatively mark your credit for up to six years. Within this period, you might not be able to acquire new credit. Also, unless your creditors think that you have the means to pay your debt within a reasonable time, you might not necessarily be approved for it.
During the time that you are supposed to pay for your debts under IVA, make sure that you are committed to clearing yourself of debt. Otherwise, your efforts to be free of debt could be all for naught.
For the instances when an IVA seems to be the perfect financial solution, however, there is absolutely no reason why you should say no to it. At the end of the day, the IVA is a great way for you to pay off the debts that you can afford – and write the rest of your debts off so that you can become debt free again.