IVA debt write off: When you’re in debt, it can seem as though there’s no way out of the situation – or at least, no way that doesn’t involve years of punishingly expensive repayments and never-ending stress over your finances. But here’s some good news: there are ways to get debts written off, and many people have successfully used them to move on with their lives and start afresh. Here’s everything you need to know about IVA debt write off to get started on your new, debt-free life today!
What is an IVA?
An IVA is a legal agreement between you and your creditors to pay off a portion of your debt. Your creditors agree to write off the rest of the debt if you make regular payments for a set period of time – usually five years. After the five years, any remaining debt is written off. This means you no longer owe money to your creditors and can start fresh with a clean slate.
How does an IVA work?
When you have an IVA, you make monthly payments to a licensed insolvency practitioner (IP) for 60 months. At the end of the term, any remaining unsecured debt is written off. This means you don’t have to pay it back. You may have to give up some of your assets, such as your home, but you’ll be able to keep essential items like your car.
Is it right for me?
Deciding whether or not to write off your debts is a personal decision that depends on your unique circumstances. If you’re struggling to make ends meet, writing off your debts may be the best way to get back on track. However, if you’re able to afford your monthly payments, it may be better to continue paying down your debt.
What happens next?
When you have an IVA, the first thing that happens is that your creditors agree to freeze all interest and charges on your debts. This means that you will only have to pay back what you owe – not more. You will also agree on a monthly payment that you can afford. Once you have made all of your payments, any remaining debt is written off. This means that you are no longer liable for this debt and it will not show up on your credit file.
What if I can’t afford my payments after the completion of my plan?
If you cannot afford the payments after the completion of your plan, your creditors may agree to write off debts part, or all, of your remaining debts. This is called an IVA debt write-off. To be eligible for an IVA debt write-off, you must have completed your five-year repayment plan and made all of your payments on time. If you have not completed your five-year repayment plan, you may still be able to negotiate a partial write-off of your debts.
Final thoughts
If you’re struggling with debt, it’s important to know that you have options. One of those options is an IVA, or Individual Voluntary Arrangement. An IVA is a legally binding agreement between you and your creditors that can help you pay off your debts over time. If you’re considering an IVA, there are a few things you should know. First, an IVA can only be used if you’re unable to pay your debts in full and you’re unable to reach a repayment agreement with your creditors. Second, an IVA can last for up to five years. And third, if you successfully complete an IVA, any remaining debt included in the agreement will be written off.
You can find out more on how to apply for an IVA on Monemyst.
