Anyone can get into debt, even countries and banks, look at Greece, Iceland and the Lehman brothers. The recent economic crisis meant that a lot of people may have gotten into more money trouble than they anticipated. Getting into debt can be one of the top 5 most stressful things that can happen to a person, it is easy to try and sweep the problem under the rug. However this is not the kind of problem that will disappear. Some people's debt problems can spiral out of control, so in a bid to solve these problems they may need to take out a debt management plan.
Recent research has shown that Individual Voluntary Arrangements (IVAs), as well as Debt Relief Orders (DROs) have risen 4.6 percent since the same quarter last year. This shows that more people are addressing their debt problems, but what do these terms mean? What is an IVA, what is a DRO? If you are worried about debt, here is a breakdown of the terms to give you the full picture.
An IVA is a debt management plan that can be set up to avoid bankruptcy, it is a contract that is set up with creditors to repay an agreed amount of money on a monthly ba
sis for minimum of 5 years. An IVA can be used an alternative to bankruptcy, but can also be set up after someone has been made bankrupt. Advantages of taking out an IVA include:
-When the IVA is completed your debts are written off and you are given a fresh start
- Taking out an IVA will prevent further charges or interest being added to your debt
-Your payments are based on your ability to pay as an IVA has a certain amount of flexibility
Another debt solution plan is a DRO. This is a new form of bankruptcy in the UK that was enforced in 2009. It is specifically for people who have little or no assets and a disposable income of less than 50 pounds a month, however homeowners are excluded from being able to take a DRO. Advantages of a DRO include:
-You will be protected from enforcement action from creditors
-You will be debt free at the end of the 12 month period
-It's a cheaper and a more simple approach than declaring yourself bankrupt
It is always best to seek help about any debt problems that you may have before you get to the stage when you need to take out an IVA or a DRO. Be smart and take some action today.
Recent research has shown that Individual Voluntary Arrangements (IVAs), as well as Debt Relief Orders (DROs) have risen 4.6 percent since the same quarter last year. This shows that more people are addressing their debt problems, but what do these terms mean? What is an IVA, what is a DRO? If you are worried about debt, here is a breakdown of the terms to give you the full picture.
An IVA is a debt management plan that can be set up to avoid bankruptcy, it is a contract that is set up with creditors to repay an agreed amount of money on a monthly ba
-When the IVA is completed your debts are written off and you are given a fresh start
- Taking out an IVA will prevent further charges or interest being added to your debt
-Your payments are based on your ability to pay as an IVA has a certain amount of flexibility
Another debt solution plan is a DRO. This is a new form of bankruptcy in the UK that was enforced in 2009. It is specifically for people who have little or no assets and a disposable income of less than 50 pounds a month, however homeowners are excluded from being able to take a DRO. Advantages of a DRO include:
-You will be protected from enforcement action from creditors
-You will be debt free at the end of the 12 month period
-It's a cheaper and a more simple approach than declaring yourself bankrupt
It is always best to seek help about any debt problems that you may have before you get to the stage when you need to take out an IVA or a DRO. Be smart and take some action today.
john mce
John McE writes articles on a number of subjects including IVA, individual voluntary arrangements and IVAs. Find out more about different types of IVA, individual voluntary arrangements and IVAs
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