How to Be Debt Free in 60 Months
Becoming debt free in 60 months may seem like an impossible dream, especially if you have multiple debts spread over a number of different creditors and you find it a struggle making just the minimum payment to your debt.
However, there is a form of government help which may be able to offer you help with your debt by allowing you to be free of your unsecured debt in just 60 months. This is known as an Individual Voluntary Arrangement (IVA).
What is a Debt Free IVA?
IVA legislation was introduced as part of the Insolvency Act of 1986 as a more realistic alternative to bankruptcy. It allows those who have high levels of unaffordable debt, typically over ?5,000, to be debt free in as little as 60 months with the distinct advantage of avoiding the stigma and long term consequences of bankruptcy.
A debt free IVA is an agreement between the debtor and their creditors. Once the creditors have agreed to the terms of the IVA, a debtor must commit to making set monthly payments for a standard period of 60 months. The monthly payment will be based on individual financial circumstances, and the Insolvency Practitioner (I.P) will help the debtor to agree an affordable monthly payment. As long the terms of the IVA are complied with, the debtor is granted to have any of the unpaid debt written off.
Advantages of an IVA
If you qualify for an IVA then it is often the best way for you to become debt free.
You agree to pay your creditors a monthly payment that you can realistically afford, for a typical 60 month period. Although you will have to pay back a proportion of your debt, it does have the distinct advantage over bankruptcy as you do not have to risk losing your home or hinder your future job prospects.
An IVA is the only debt solution (apart from bankruptcy) which allows you to write off debt which you cannot afford to pay back to your unsecured creditors. It can often be an incentive to know that you will be debt free in a set time frame, often 60 months, as opposed to a debt management plan where you will be paying back all of your outstanding debts for many years to come with no fixed completion date.
Both you and your creditors will be bound by the terms of the IVA, which can offer you some real advantages. Your creditors will not be allowed to pursue any further legal action against your debt providing that you keep to the agreed terms, and they cannot add any further interest and charges to your debt.
Disadvantages of an IVA
You should always be aware of any disadvantages which might come along with a Debt Free IVA.
You must be able to make sure you can afford the payments for 5 years, although your I.P will help you come to a payment which you can afford after cost of living expenses have been deducted. If you fail to make your monthly payments then your assets will be at risk as creditors can start bankruptcy proceedings against you. If at any time during the IVA you feel as though making payments is going to be a struggle, then it is important that you get in touch with your I.P before you miss your IVA payment.
Can I be Debt Free in 60 Months?
If you think that becoming debt free in 60 months with an IVA is the right debt solution for you then please get in touch with DebtFree.co.uk. Our specialist debt advisors will be able to take you through your financial situation and see if you are suitable for an IVA.
You should be aware that not everyone qualifies for an IVA, and even if your IVA is proposed to your creditors this does not guarantee it will be accepted. For your IVA to be accepted, 75% of your creditors (in terms of debt value) must agree to it. Even if the other 25% decline the IVA, they will still be legally bound by the terms.
Are there Debt Free Alternatives?
If you think that an IVA is not the right debt solution for you, or you wish to explore your alternatives, let DebtFree.co.uk help you. We have access to a number of leading debt solution, so no matter what your level of debt or how many creditors you have, we are confident that we can find a debt solution which is right for your financial circumstances.
For free information about Debt Free IVA’s, please get in touch today on {Phone Number} or take the Debt Free Test to discover your potential debt solutions.
Article Author :Natalie_Cole
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