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People are curious at to the length of time an IVA (Individual Voluntary Arrangement) will take to set up, so detailed below is step by step information on how an IVA is arranged.

This schedule has been set out in accordance with the guidelines administered by the Court and Insolvency Act 1986. It will fluctuate according to each individual’s response time in completing and returning forms or requested information.

A typical time span could look something like this:

Day 1: Your case will be received by your debt management company.

Day 2: A receipt of acceptance will be sent out to you.

Day 7: You may be asked to supply any additional information regarding your IVA proposal.

Day 14: A draft agreement will be sent out for your perusal.

Day 16: You will need to apply to the court for an interim order which will protect you from any further legal action from creditors whilst the IVA is being arranged. This will protect you right up to the creditors meeting.

Day 18: Your interim order will be granted.

Day 32: Arrangements will be made for your creditors meeting and a ‘Nominees Report’ will be prepared. A nominees report is a detailed statement written by your Insolvency Practitioner to your creditors and outlines your IVA proposal.

Day 39: The creditors meeting takes place.

Day 60: You will receive notice if your IVA proposal has been accepted.

Reputable debt management companies receive up to 100 telephone calls per day from people who have been given poor IVA advice.

An IVA (Individual Voluntary Arrangement) is an ideal way to reach an amicable arrangement with creditors. This way the debt can be repaid in manageable monthly sums over a period of around five years.

Over the past two years, applications for an IVA have doubled. People choose this option to avoid the stigma associated with bankruptcy. It also allows them to hold on to their assets.

However, it is worth bearing in mind that an IVA may not be the ideal solution for everyone as they do incur fees. Many people are overcharged for an IVA and bogus firms are charging customers large upfront fees for an inferior service. Hence the reason why IVA advice should be sought from reputable debt management companies.

A reputable debt advisor will ensure that he has satisfied set criteria before an IVA is recommended. One of these stipulations is that a debtor must have a minimum of £200 cash per month to survive on and he/she must owe money to at least three individual creditors.

An example of bad IVA advice can be found when a debtor is told that an IVA will not show up on credit records when in fact, it will. However, an IVA can be set up in as little as six weeks and all of your creditors will be taken off of your hands. You simply pay an agreed, affordable monthly payment to your Insolvency Practitioner, which will include a percentage for his fees.

An IVA (Individual Voluntary Arrangement) is set up by an Insolvency Practitioner (IP) and there are many IP’s based in the UK. However, finding the best one may take a bit of time and effort.

Many people prefer to use an intermediary IVA company who will assess their requirements and shop around for the best Insolvency Practitioner for their needs. However, some IVA intermediaries offer a better choice of IP’s than others. As the amount of people choosing an IVA grows with many people choosing it over bankruptcy, the industry has grown largely so you must ensure you get the best advice you can.

One good piece of debt advice is to follow the recommendations of others. If you have been recommended an IVA company, then chances are they will work equally as well for you. Alternatively, the internet will provide a huge source of IVA companies but the following IVA advice will help to ensure that you are not misled.

• Be absolutely sure that you feel comfortable talking to the adviser. Make sure that you ask plenty of questions and that you are happy with the extent of their knowledge.
• Never use an IVA company who insist on a fee for preparing paperwork as most companies will do this for free.
• Be certain that the IVA company has carried out an intense analysis of your financial circumstances, so as they fully understand your financial situation and are able to advise accordingly.

When it comes to IVA, many people question the responsibility of a spouse with regard to their partner’s debt.

Unless you have agreed to become a guarantor for someone or you jointly own a debt, you are not financially responsible for their finances.

However, with an Individual Voluntary Arrangement, the matter becomes a little more complicated as creditors will find it hard to believe that a partner has not benefited from any of the debt that you accrued. As a result, they will request full details of your household expenditure rather than a record of your sole expenditure.

An IVA is more likely to be granted if both partners agree to make monthly payments. If your spouse has moved away from the family home, he/she will not be required to make payments to your IVA but if your partner returns at a later date, the IVA will have to be adjusted to account for the change in your financial circumstances.

Many people help out their spouse when they are in debt but in a lot of cases this act of kindness is reciprocated by a continued accumulation of bills. An IVA can be a firm but fair way to help a spouse take responsibility for bad spending habits and put them back on the road to financial stability.

A couple do not have to be married to apply for a joint IVA. Some find it easier to share an agreement as it interlocks both of their debts into one affordable sum. This way, both partners take the responsibility for payments.

Bankruptcy is rising and leaving a marked difference between the numbers of people applying for an IVA (Individual Voluntary Arrangement).

Experts predict that rising interest rates could make the gap between the two even wider.

The number of people becoming insolvent has risen by 4.2% in comparison to last year, thus inflating the figures for bankruptcy. IVA figures showed a marked decline.

In numerical terms, 26,956 individuals sought debt advice and opted for bankruptcy as a means of dispersing their debt this year. During 2006, only 16,258 people chose bankruptcy to resolve their debt problems.

Figures show that people opting for an IVA dropped by 10,698 but experts blame this drop on proposals being rejected by banks, rather than consumers losing interest in an IVA and its many benefits. As a result, many have had to turn to bankruptcy as a way to clear debt.

As we head into the cold winter months, it is likely that more and more people will seek debt help to cope with rising fuel bills and increasing interest rates. As a result, the figures for bankruptcy and IVAs will be on the rise once again.

Christmas will also bring along its entourage of debt and the internet will do its best to encourage more people to shop online. This will push many into the red.

We are bombarded with information regarding bankruptcy and IVA(Individual Voluntary Arrangement). No wonder, it is difficult to know which one will work for us.

Deciding which option to take will depend solely upon your own individual circumstances. Therefore, it is always advisable to seek professional debt advice before making a final decision.

Why choose bankruptcy?
It is one of the swiftest debt solutions available as the whole process only lasts for one year, thus freeing people of their debt and allowing them to start again.

However, bankruptcy can be disruptive to many careers including accountancy, the police and the armed forces. It will also be impossible to become or maintain a job as a company director or to hold public office. A bankruptcy also demands the distribution of all assets to creditors, including the family home. Gaining credit after bankruptcy can be quite difficult and a mortgage may be impossible to obtain.

Why choose an IVA?
An IVA will not affect your career and is a popular option as it allows an individual to pay off a large percentage of the debt over a five year period. An IVA comes with the added advantage of allowing an individual to hold onto their assets and keep their bank account. This gives them a better chance of being able to obtain credit when their IVA has been settled.

Many have heard of debt consolidation but it is surprising how many people do not understand what debt consolidation actually is.

As a result, many miss out on the chance of a debt consolidation loan because they think that their application will be refused if they have a lot of debt. They fail to realise that a debt consolidation loan is specially arranged to help alleviate debt and forms an affordable payment solution to both creditor and debtor.

A debt consolidation loan will allow a debtor to combine a multitude of bills into one affordable sum and is an ideal way to resolve multiple credit card debt. By combining all credit card debt into one manageable sum, interest rates reduce and the balance can be paid off much quicker.

Unlike bankruptcy, a debt consolidation loan allows people to retain their assets. It will also help them to reduce their debt and still maintain a good credit rating. If you add together all of the combined interest rates from individual creditors, it is easy to see how much can be saved with a debt consolidation loan as the APR will be much lower than a batch of interest charges.

An ideal debt consolidation loan is a flexible plan which allows customers to make larger payments if extra income becomes available. This way they can close their account without any penalty fees being added.

If you are looking for a way out of debt and have heard of debt consolidation but never really knew what it meant, you should now be able to see that it is a very helpful way to resolve debt problems. Call the Debt Advice Trust for more information.