There are an increasing amount of people who are going through a difficult time with debt payments in the UK.

Many of these people are seeking help in the form of an IVA.  IVA applications are on the increase as many face insurmountable debt. To apply for an IVA you usually need to contact a a company that specialises in debt.  There are many of these companies on the Internet.  With your help, this company will draft a proposal which will outline how much you owe, your earnings, and the amount which you can pay over the next 5 years.

The proposal must be approved by the creditors who own at least 75% of the total outstanding debt. Should the creditors agree, part of your debt will be written off and the interest will be frozen.

There are usually no upfront charges for IVA consultations.  Getting advice from an IVA expert can benefit you in making the right decision regarding your debt.

To help you on your way we have listed some frequently asked questions about IVA’s

Who can apply for an IVA?

An IVA is available to all Individuals, who are experiencing financial difficulties on their unsecured debt. To apply for an IVA you should have a stable income and surplus cash each month after paying for your basic living costs. To make an IVA work for you you should have at least £15,000 of unsecured debt and more than 3 creditors.

Is an IVA free?

Most debt management companies do not charge up front fees for IVA’s. Fees can vary according to the overall level of debt and are built into the monthly payments. A full detailed schedule showing the level of fees to be charged in an IVA is included within the IVA proposal for you and your creditors to see.  Do not go with any companies that charge upfront fees for taking out an IVA.

How long does an IVA last?

An IVA typically lasts for 60 months and will continue as long as regular payments are maintained.

Which debts can be included in an IVA?

The debts that can be included in an IVA are:

* Outstanding Inland Revenue debts
* Loans from friends
* Credit and store cards
* Bank accounts
* Finance company loans
* Outstanding VAT

Can I arrange an IVA directly with my creditors?

NO.  To apply for an IVA you will need the services of a licensed Insolvency Practitioner who will  supervise and review your IVA throughout the Arrangement.

What happens if I fall behind on payments on my IVA?

Any payment defaults may result in the cancellation of the IVA and could lead to bankruptcy.

It’s important that you speak to your supervisor if you think you may have a problem making a monthly payment. There may be options available.

An IVA is a viable method for people in the UK to write of debts that they cannot afford.  If you are in this situation, it is important that you seek help as soon as possible as delaying the inevitable will make your situation worse.

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I was listening to the radio a few days ago an heard an advert saying that if you took out a credit card before March 2007 you can legally write off all the debt on it due to a loophole.  If you have heard a similar advert and are considering trying to write off your credit card debt there’s a few things you need to know.

You are legally entitled to challenge any Consumer Credit agreement that was signed prior to 6th April 2007.  This is because there are flaws in the Consumer Credit Act 1974.  There are many companies on the Internet that will offer to do this for you but they can charge anywhere form £100 – £400 per credit card plus other fees.

You can actually do this process yourself for a lot less although it can be more daunting not having the proper guidance so for some people going with these companies may be better.  If you decide to go thing

alone the first thing you should do is send a request for your Consumer Credit Agreement.  You can send a request along with the statutory fee of £1. This must be a true copy of the original agreement between yourself and the credit card company.

The credit agreement must have both signatures and the prescribed terms on the same side of the same page.  The credit card company are obliged to supply you with the credit agreement within 12 working days.  If they fail to do so, the debt is now in dispute. Once the debt is in dispute, the credit card company are not allowed to chase you for repayment or mark your credit file with defaults. If they try and pass the debt onto a debt collection agency, they will be breaking OFT regulations.

Many creditors are sending what they call ‘reconstructed’ agreements. These are not the original agreements, just a document that they have drawn up to show you what they think your credit agreement should look like. They will then claim that this satisfies their obligation in response to your CCA request. In they eyes of the regulators, that is debatable and it leaves you in a bit of limbo. This doesn’t always mean they don’t have the original, it just seems that they don’t want you to know if they do or don’t.

You should also send a SAR.  A SAR is used to obtain all records about yourself from your credit card company that they are holding under the data protection act 1998.  When a company holds information about you they must register with the data commissioner and ensure that they adhere to the act. Under the Data Protection Act you may request all information held with the company.  The fee can be no more than £10.  If your credit card company fail to send you the information within 40 days you can report them to the to data commissioner.

Once you receive your credit agreement you should check the following to tell if it is enforceable?

* All the below criteria must be contained on one side of one single document.

* It must clearly state “Consumer credit agreement regulated by the consumer credit act 1974

* It must contain both the creditor & the debtor signatures.

* It must contain all the terms including repayment schedule, interest rates e.t.c.

Your agreement should also be clear and easily readable.  If it does not meet these criteria then your debt may not be enforceable.  You should be aware that credit card companies will do their best to make you pay the debt and this can prove daunting.  That’s why it may be best to go with a company that will act on your behalf.  If you can find a “no win, no fee” company, that’s all the better.

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