People hold all sorts of debts and for various reasons. Borrowers take out loans to finance personal projects or business endeavors. Others may take out a mortgage loan to buy a home while others may borrow an auto loan so as to purchase a car. Most borrowers do so with the intention of repaying the loans and debts, including all fees and charges levied by the lenders.
Sometimes, however, repaying a loan may prove to be difficult. There could e various reasons for this. A borrower may lose their job or source of income, especially with the current tough economic times across the UK. It could be that a loved one has passed away and the financial burden on the borrower increases multiple times. When making loan repayments as required proves too challenging to a borrower, there are some remedies provided to them by law. One of the most popular of these remedies is an IVA agreement.
An IVA, or Individual Voluntary Agreement, is a debt solution that is provided in the UK laws. This agreement allows all debts owed by an individual to be consolidated into one debt, and this debt will be restructured so that repayment amounts are within the means of the borrower. An IVA agreement, once in place, will usually stop all interest charges as well as penalty fees charged on the pending loan amounts, so that the borrower only pays back the amount due at the time of signing the agreement.
To qualify for an IVA agreement, a borrower must owe at least 15000 pounds to more than one creditor. The borrower will have to demonstrate financial hardships and should be able to afford at least 150 pounds per month towards the resettling of the consolidated debt.
One of the benefits of an IVA agreement is that it stops creditors from directly contacting their client regarding the debt or any other matter. Since the IVA agreement is signed and approved by an insolvency practitioner, creditors may only make contact with their client through the insolvency practitioner. This will be a great relief to any borrower who has had to endure all those demand calls from creditors.