what is an IVA

An IVA – or Individual Voluntary Arrangement – can prove to be an extremely useful way of bringing debt problems under control and heading off what would otherwise seem to be the only other alternative, namely bankruptcy. Despite the growing numbers of people forced down such a route, bankruptcy retains not only a painful stigma but several severe penalties, many of which can affect the bankrupt’s present and future employment prospects. An IVA, therefore, can be a very powerful device for avoiding such a fate.

In simple terms, the IVA is based on a recognition by both the debtor and his or her creditors that the repayment of a significant total of debt has become practicably unfeasible. Instead, the IVA represents the debtor’s commitment to making the best possible settlement of those debts, whilst acknowledging that the entire obligation to repay cannot be met. Through a comprehensive and honest declaration of his or her current and foreseeable circumstances, the debtor aims to convince the creditors that the proposed IVA represents the fullest repayment likely to be achievable. In return, the creditors agree to the repayment terms set out in the IVA and after an agreed period (typically five years) any remaining debt is written off.

In a nutshell, therefore, an IVA can be seen as a bargaining process in which the debtor commits to repaying a proportion of his or her debts, shown to be the most that can realistically be expected, and the creditors for their part agree to this amount being the most they are likely to recover.

If the creditors agree to such an arrangement, it becomes a legally binding contract. Once it has been drawn up, the proposed IVA becomes the basis on which the debtor can apply to the courts for an Interim Order which restrains the creditors from taking any further legal action to recover their debts. Instead, a meeting of all of the creditors is called in order for them formally to accept or reject the terms of the IVA. This requires three-quarters of the creditors, in terms of the value of the total debts owed, to approve the arrangement.

If the IVA is approved, it is the debtor’s responsibility to ensure that the agreed repayment terms are kept. Provided the debtor does so, at the end of the IVA’s term, the debtor is free from all of the debts, whatever amount has actually been repaid.

Given the formal and legally binding nature of an IVA, it must be drawn up and supervised by  a recognised and qualified professional. This might be a solicitor, an account or an insolvency practitioner. The appropriate professional fees will be charged for this service and these fees are typically incorporated into the total of the debts to be recovered under the terms of the IVA. Whilst this adds to the cost of an IVA, the financial penalty in the longer term is still likely to be less than that associated with bankruptcy.

Given its formal nature and the costs associated with setting up and managing an IVA, it is likely to prove a solution to problems arising from more substantial or intractable debts amounting to around £12,000 or more.

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small print

One of the biggest mistakes that people make when they are taking out any sort of credit – loans, credit cards, anything, is that they don’t read the small print. People are often so happy to be getting the credit that they want that they will sign almost anything. For others it is simply not caring, trusting that they have a good deal. Others are blinded by the ’special offers’ that caused them to sign up in the first place.

But why is it such a big mistake?

The Small Print

In almost any deal that involves credit or debt you ALWAYS need to be considering the small print. We could talk generalities but it might be more illuminating to consider specifics for a second. Let us take a look at credit cards:

With credit cards you might think that you are getting a great interest rate… but that is often just a cover charge. Many credit cards offer a wonderful interest rate for the first 6 months, but after that you will revert to the ‘normal’ interest rate which is far less attractive and will, in fact, be likely to cost you money.

Many credit card companies try to hide their fees. Everyone will miss the occasional minimum monthly payment – even if for nothing less suspicious then forgetting to make the payment. Very few companies are prepared to admit just how much they will charge you for this kind of problem.

Monthly payments are something that is creeping into every day life for such things as credit cards. We’re not talking about minimum monthly payments for money that you owe, what we mean here is monthly payments for using their services. This information will usually be hidden in the small print.

What does any insurance you have on the card cover you for? Many companies will be happy to tell you that there is insurance on the card and any purchases made by it – but they are less forthcoming about what it actually covers.

Credit cards, as in this example. And debt in general, can have a lot of hidden extras. Always read the fine print before signing up – otherwise you are playing fast and loose with your finances.

debt costs more than just money

Many people and companies just measure your problems of debt in terms of how much you owe.  Whilst that is the obvious, and worthwhile, measurement of levels of debt it does hide the true cost of debt.

Debt is more than just a figure, it is a massive part of people’s lives.  If they owe a lot of money, if they are in a lot of debt, that it can effect everything that they do.  It can play a massive part in their lives and cost them more than they think

The REAL Cost of Debt

• Sleep.  Most people who are deep in debt have trouble sleeping.  This is because they are spending all night worrying about their debts, how they are effecting their lives, how they are going to pay.  A good nights sleep is often beyond many people in debt.
• Stress.  Many people in debt stress about how much their owe and how they are going to afford repayments and the other bills at the same time.  This leads to high stress levels which can effect their personalities and their health.
• Personal relationships.  Relationships with friends and loved ones can deteriorate as the stress effects personalities and people feel frustrated and angry at their own debt levels and so lash out.
• Missed opportunities.  We can find that opportunities are very limited when we are in debt.  We lack the money to go out and have fun very often, if at all.  Any trips, or nights out, that others may be having aren’t really an option when you are snowed under with debt.
• Fiscal costs.  Fees for yet more missed payments are regular, interest builds up quickly.  Being in debt is not just an issue for right now but continues to cost you more and more money.
• Financial.  It is not just the amount of debt owed but how it fits into monthly bills.  You still need to be able to afford to eat, to have a home, debt makes this a very difficult proposition.
• Credit.  If you find you are defaulting on payments and loans you will find that your credit report gets impaired.  We rely on our credit report to get credit for everything from car finance to mortgages, so having a problem credit report can end up costing you problems in the long run.

Debt is more than just the money owed.  It effects every part of your life if you let it.  Which is why it is always vital that you take complete control of your debts, that you put a proper debt management system into place.

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money saving tips

This may sound odd but cash can actually save you money.  We live in a world of plastic, a world where almost all financial transactions are carried out by computers – and we tell the computers what to do by using little plastic cards

This is all very convenient – and these cards certainly have their place, as we’ll see later.  But they can also make things more expensive.  It turns out that spending cash can actually save you money.

Cash is Money Not Plastic

The thing about having actual money in your pockets rather than a plastic card is that it is real money.  We’re not talking about what the bank tells you etc, cold hard cash is money that is accepted almost anywhere.  You know where you stand with it.  Importantly you also know how much of it you have.

Too many people end up going over their overdraft limits and so paying fees because they forgot what money they have in the bank.  What money they have going in and out, what their money is doing.  Everything is automated for our convinced – but then so is billing us when we get it wrong.  If you use cash to pay for everything you can’t be caught out by such automation problems.

You are also far less likely to spend money you don’t have.  And remember that is what you are doing any time you use your overdraft or credit card, you are spending other people’s money on the promise that you will pay them back.  That can be dangerous.  It is all too easy to promise that you will pay back money that you later can’t afford.  With cash if you have it then you can spend it – but you can’t get in trouble with it.

By having cash in your pockets you also can limit your spending.  By only taking out as much cash with you as you need – and no means for getting more, you ensure that you can’t go over whatever budget you have set yourself.  It makes sticking to whatever financial plan you have set yourself far easier to manage.

Emergencies

Of course that is not to say the debt cards and credit cards don’t have their place – in fact they do.  If you are going somewhere you don’t know having access to your money from any cash-point can be useful if you get into any trouble… you know you can always get hold of money in an emergency.

As we said it is also convenient, never has this been more apparent than travelling abroad.  No more travellers checks or expensive exchanges – you can use the ATM’s from the country that you are visiting.

Such plastic also allows you to shop from a distance – catalogue, internet, over the phone or whatever.  You can spend the money how you want to.

But it is all that convenience that makes these plastic spending buddies so expensive in the first place.  Yes they are convenient, but you will save money by using cash.

take control of debt

Do you know what the biggest mistake that people make with regards their finances is?  Is it that they forget to pay?  Or that they take on too much debt?  Perhaps it is that they don’t organise it to the best of their ability?

No, the biggest mistake that most people will make with regards their finances is that they bury their head in the sand when things start to go wrong.  They decide that if they ignore it they will go away, that things will get better if they pretend that bad things aren’t happening.

But the bad news is that it doesn’t work like that, finances don’t magically improve if you aren’t looking at them.  Acting like an ostrich does no one any good.  Not you, not the debt company and certainly not your family.

Get Your Head Out Of The Sand

So how does one go about improving things, avoiding this classic mistake – or rectifying it as soon as possible?  How does one get ones head out of the proverbial sand?  How how will that improve things?

To properly gain control of your finances the most important step that you can take is to know what your finances are.  You need to know what you have, and what you owe.  Your income, your expenditure, your essentials and your luxuries.  You are going to have to go through your books.

Where to start

The first thing that you need to do is understand just what your income is.  For most people this is easy.  They will either have a single income from their job, or a double income if part of a couple.  But all income needs to be considered, so if there are other streams of income than just a job pay them attention.

This could be other part time jobs, freelancing, shares, businesses owned – anything that puts money in your bank needs to be taken into consideration when doing your finances.

Next consider your essential expenditure.  Not debts right now – just mortgage/rent, food bills, heating bills, electricity bills etc.  Bills that there is no way, even with the cleverest accountant in the known universe, you would be able to get out of.

Now consider your debts.  Think of everything, car loan bills, credit card bills, other loans, etc.  Add them up and make a note.  Also think of less essential but still important bills such as phone bills, tv bills, computer etc.

Finally work out your nonessentials that you like to spend.  Nights out, drinking budgets, socialising etc.  Try work out a typical month if you can – going over old bank statements can be especially useful here.

What you now have is a general snapshot of what your finances are.  You know your income, you know your vital bills, your important bills, your useful bills and your fun outgoings.  This overview now allows you to look at what you need to do to change things.

It could be that you will realise how bad things are, how much you are spending.  It could be you will see you need to reduce bills or increase your finances.  But whatever it reveals you are better off knowing.  Burying your head in the sand won’t do anyone any good.

If you find yourself with a bad credit rating, it can sometimes be very difficult to get your finances back on the right track again. However, even if your credit rating is currently poor, there are things you can do to improve your situation and help get your credit rating back up to a good level. When attempting credit repair in the UK, it just takes a little planning and dedication with regards to the process, as well as a bit of know-how as to where to start and what steps to take.

If you currently have one or more open credit cards, make sure that you start to make at least the minimum payments required on time each month, even if you have paid them late in the past. Although it will seem like you are not making any progress on paying down the balance, you have to at least get the minimum payments made on time, so that you can start to repair any marks against your credit that have resulted from making these payments late. You also want to avoid applying for any additional credit at this point, because it will be likely that you will be turned down, which will do even more damage to your credit rating. Instead, concentrate on paying cash for any new purchases as often as you can. If you absolutely have to use a credit card, make only small purchases using one of your existing credit cards, and pay them back promptly each month.

If you are currently behind on any loans or credit card debts, do not ignore the problem as it will only spiral out of control making it more difficult for you to repair your credit. Make an effort to contact the lender, and see if there are any arrangements that you can make to help alleviate the problem. Lenders are generally more than willing to work with you to solve problems, and your lender might be able to restructure your debt into a repayment structure that is more manageable for you. This is much preferable to falling further behind on your payments and negatively effecting your credit rating even further.

If you currently have bad credit, but do not have any credit cards, you can help to improve your credit rating by applying for a high interest credit card. While this might seem to be a step backwards, if you use it only to make small purchases, and pay them back on time every month, this can help you greatly in rebuilding your credit rating.

Another important thing to keep in mind when working on credit repair in the UK is to check your credit history and examine it carefully for any possible mistakes. If you find errors on your credit history, go through the process of getting these items corrected and removed from your credit history, as erroneous negative entries on your credit record can be extremely detrimental to your credit rating. These mistakes are often very easy to get fixed which can make the difference between a bad credit rating and a good one.

Payday loan can help get through the month

In these tricky economic times, it’s almost impossible to know when you’re going to hit financial difficulties. These come in many forms, and can be caused by many different things, but ultimately it comes down to how you handle these problems, which will decide your financial future. In boom periods, most people are able to budget carefully and maintain a good balance between the amounts they spend, and the amounts they earn. This balance between income and expenditure is vital to a person’s financial stability, but in difficult times, can be disrupted very quickly. All it takes is a month or two without your normal levels of income for you to start struggling to pay your bills. Even if you have managed to keep yourself in employment throughout the tough times, you can still find yourself needing an extra injection of cash to help you through the month.

This is where UK payday loans come into action, and they can be massively beneficial if you’re in this situation. A UK payday loan will allow you to borrow up to £1000 on the basis that the money is paid back when you receive your next pay check. You will be securing any borrowing on the back of a post-dated cheque that will be entering your account in the near future. So if you come up short on your bills, and are struggling financially, yet you will be receiving a lump sum from your employer at the end of the month, a UK payday loan could be a great stress reliever.

One of the great things about payday loans is that they don’t require a credit check. You can have a horrible credit report, but as long you can prove that you will be able to pay back the money on a certain date, you’ll be able to borrow from a payday loan. It is important to remember, however, that if you don’t pay back this amount when agreed, it will negatively affect your credit rating.

Payday loans are subject to high levels of interest, and are only provided over relatively short periods of time (generally between 7 and 14 days, possibly longer), so they aren’t ideal, especially if you’re in serious financial difficulty. However, as a way of simply getting yourself over the line at the end of the month, they are fantastic. Thousands of people around the UK rely on these types of loans, primarily because it’s sometimes a very fine line between spending more than you earn in a particular month, and if your pay check doesn’t come quick enough, you might not be able to pay your bills.

If, following a review of your application, the loan company feels you are a good investment, the money could be in your account in as little as 24 hours. It really is one of the quickest and easiest ways of getting a short injection of cash when you hit difficulty.

Get the best deals on UK Payday Loans see >>> Payday Loans

Having a car is pretty much one of the most important things in any person’s adult life. It can be the deciding factor between whether you get a job or not, whilst it can give you freedom that nothing else can. If you’ve been struggling financially over the last few years, especially because of the financial crisis, buying a car could be filled with difficulties that were previously unforeseen. If you’ve got a bad credit rating, a county court judgement, mortgage arrears, or anything that else that makes you a potential risk to a traditional lender, you’re going to struggle to get the finance you need to buy your car.

Car finance is just like any other short term loan, and is generally provided in small amounts, which obviously reduces the risk to the lender. The car finance company will be able to provide you enough money to buy the car you are looking for, provided they don’t think you are too much of a risk, which is unlikely. The main reason guaranteed car finance companies may reject you is a history of fraud.

The guaranteed acceptance car finance company will not perform a credit check on you; they simply don’t care about your financial history. All they care about is your financial present and future, which is massively helpful if you’re simply looking to get back on track after a difficult couple of years.

Your credit rating could have been harmed for a number of reasons, things like a bad history of repayments, or even just errors about your identification can cause you to be rejected. For these reasons, it’s sometimes unavoidable that you get rejected by traditional finance companies, which is why thousands of people every year turn to guaranteed acceptance car finance.

One problem many people find is that they have been left unemployed and looking for work. Whilst looking for work, they realise that they need a car, not only during their job but also to be move to different locations for interviews. Because of their unemployment and bad credit history, these people are unable to get the finance they need in order to buy a car. This means that they can’t find the jobs they want, or aren’t accepted for a job they applied for, and the cycle begins again. This problem is extremely difficult to get out of, which is why car finance companies are so useful.

Look to use a reputable car finance company, who has years of experience in dealing with these kinds of situations. Despite being a relatively new form of business, guaranteed acceptance finance still has its major players. Choosing smaller, less well trusted, companies can be a risky move if you’re looking for hassle-free financing.

Car finance

Click >>> To apply now for Guaranteed car finance

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Get a UK bad credit bank account

If you’ve had financial difficulties before, you’re not alone. A surprising number of people struggle financially at some point in their life, and we’re not just talking about going into an overdraft. Many people fall into the trap of high levels of credit card debt, so their credit rating gets adversely affected and this damages their future ability to lend. If you’ve had problems in the past, a number of banks simply won’t accept you based on your history. However, some will talk to you because they understand that sometimes these difficulties are unavoidable. These banks are much more understanding, but will also understand the risk they are taking on by letting you bank with them, therefore there will often be higher charges and lower interest rates than if you were banking with a high street bank.

Guaranteed acceptance banking is quite a new concept, since the issue of credit card debt has only really become a major problem in the last decade or so. However, some of these banks have built up solid reputations for offering services to people who have had serious difficulties in the past. The key part of any bank like this is that there are no credit checks. No matter how bad your credit history may have been before, you’ll be able to bank with a guaranteed acceptance bank.

These banks will also be able to help you manage your money much better than a high street bank. This is primarily because they understand the issues that you’ll be facing, and will not look down on your for having a poor financial history. They will be able to help you set up standing orders and other payments in order to pay your bills, whilst also giving you a number of options for cash deposits and withdrawals. Many of these banks will give you the chance to own a prepaid debit card, which you can load money on to in order to spend online or on the high street.

You’ll generally find that there is simply a one-off fee when you open the account; other than that the bank will not charge you any money at all for banking with them (apart from potential overdraft fees, depending on the bank). This represents a fantastic way to get back on track with your money, allowing you extra freedom and the ability to start from a clean state. These bank accounts are changing people’s lives as they give people a chance to take control of their finances once more. They are often extremely professional companies who spend more time on customer service than other regular banks, so you’ll be in much better and more understanding hands than you may have been in before.

For more info on Bad Credit UK Bank Accounts

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When some of us are going through a hard time in our life, there are always others who will try and prey on us. Unfortunately being in debt is no different. There are many out there who will claim they can help you and help to sort out your debt for you and you are so vulnerable at this time you want to believe them. Before hiring a credit counseling service, however, keep in mind the following are simple credit counseling scams you should avoid:

Fees: many credit counseling service companies like to take fees from both ends – both from you and from your creditors. They can do this by charge you a fee for counseling you and making repayments on your behalf. They can charge fees to your creditors as part of a success fee arrangement for getting you to repay the debt. As such, before you agree to hire any credit rating agency, always check:

1. if there will be a start-up fee;
2. if there will be any administration fees; and
3. if they are also going to be paid fees from your creditors. If the answer to any one or more of these is yes, give careful thought to whether the agency is acting in your best interests or in their best interest!

Reputation: in the world of credit counseling some agencies have a better reputation than others. Indeed, you may well find that there are certain agencies who your creditors (credit card companies, etc.) will not deal with. So, before you hire any credit counselor to act for you, check with your creditors to see if this agency is going to be acceptable to them. Always keep in mind that your creditors deal with credit counseling agencies on a daily basis, so use their expertise wisely.
Agreement: any agreement that you make that is not in writing is not worth the paper it’s not written down on! If you make an agreement with a credit counseling agency, make sure you have it set down clearly on paper beforehand exactly what is expected of you and what service is being offered to you!
While it is understandable that you want to break your cycle of debt, and commendable that you are seeking the help of a professional to do this, don’t become a victim to your desire to get out of debt, make sure that you undertake a thorough check on your credit counseling agency to ensure that they stack-up and are reputable!