Dealing in debt is never easy! If you have a small debt, you just have to make the small payments regularly to get out of it. But when you have a big debt, not only you have to manage a good amount of money that you do not already have, but you have to deal with the stress as well. When one is dealing with debt, they should never panic. It does not matter how hard the situation is there is always a way to get out of it. You can take the help of a family member or friends, or you can redesign your budget and start making monthly payments. One of the ways that can help you get out of the debt is Individual voluntary arrangement, aka IVA. It is a contract designed for people who are buried in debt to help them get out of it. IVA is basically a legal agreement between a lender and the person in debt, which allows the debt holder to pay off a chunk of the owed money over a decided period of time, which is usually five years. Let’s have a look at a few benefits IVA provides.
The biggest advantage of an IVA is that it allows you to make one affordable payment per month. The amount is decided after keeping your monthly income in mind, which ensures that no matter what happens, you will be able to make your payments right on time. You would not have to worry anymore, as now you know the fee is only a chunk of your monthly income, which is manageable. If you want to know about IVA in detail, you can click here to learn more.
It Has a Fixed End Date
Another benefit of IVA is that unlike other debt payments, this one has a fixed end date. Most of the IVA is five years long, and if you have made regular payments throughout that time and have honored your agreement, you will be out of it as soon as that date arrives.
Get Rid of Debts for Good
The moment you make the last payment of your IVA agreement, all of your debt will be written off. This means you get a clean slate, and you do not have to worry about making any payments in the future. However, if you have any mortgage, you will have to pay that as it falls under secured debts.
Your Interest Rate Doesn’t Change
Another great part about IVA is that your interest rate will be fixed in the beginning. Once the agreement is signed, the lender is not allowed to charge you any sort of interest on it. This can help you plan your long term savings as well.
IVA is Legally Binding
The above-mentioned benefits of IVA will not do you any good if the agreement has no value. That is why IVA is a legally binding agreement. This means you have to pay what was decided in the agreement, and the lender cannot force you to spend even a cent more. It also stops the lender from taking action on your property as well.
Disclaimer: This content does not necessarily represent the views of IWB.