If you're struggling to make your credit card repayments and your accounts are being turned down to collection agencies, you can use an IVA or an Individual Voluntary Agreement to reduce your debt burden. Through an IVA, you can easily get your creditors accept an alternative repayment plan through which repaying your credit card obligations becomes much easier. This is a government initiative where you require showing your financial hardship in order to qualify for such an agreement. Just as you seek debt settlement help and write off a portion of your debts, similarly, through an Individual Voluntary Agreement, you'll be able to repay an amount that is much less than what you owed to your creditors. Have a look at the ways in which an IVA can empower you with financial freedom.
It is a private agreement
An individual voluntary agreement is an agreement between you and your creditors and is totally a private deal. Though a copy of your agreement is required to be sent to the local County Court, there will be no formal newspaper notification like a personal bankruptcy. As most debtors hesitate to reveal their personal financial condition to unknown people, they can secretly settle their debts without letting people know about it.
Reduction in the principal amount
The principal amount that you owe to your creditors will be reduced drastically as the debt consultant will negotiate with your creditors to reduce the debt burden. As it is very difficult for the debtors to repay the entire amount accumulated on their credit cards, the individual voluntary agreement allows the debtors to pay off their debts in a reduced amount.
Lowered interest rates
The interest rates on your multiple credit card accounts will be lowered and you can repay your creditors in lower monthly payments. As your debt consultant negotiates with your creditors, you can repay your debts affordably without causing much strain on your wallet.
Valid option to avoid bankruptcy
The IVA is a valid option to avoid filing bankruptcy. As you incur huge amount of credit card debts and see that you cannot repay your monthly payments, you may be tempted to file bankruptcy so that you can relieve yourself from all debt obligations. But by entering into an agreement with your creditor, you can restructure your repayment plan so that you find it easier to repay the loan.