The Advantages and Disadvantages of an IVA


The Advantages and Disadvantages of an IVAEvery year, thousands of people in the UK enter into an Individual Voluntary Arrangement (IVA) as a solution to their debt problems. An IVA is a formal solution, whereby an agreement is reached between an individual and their creditors for the repayment of either partial or full debts.

An Individual Voluntary Arrangement consists of regular repayments, made to an insolvency practitioner, who then splits the repayments omongst creditors. Although they are not technically mutually exclusive, IVAs are typically seen as an alternative to declaring bankruptcy.

However, when deciding upon a debt solution, it is important to understand the advantages and disadvantages, in order to ensure the solution suits your individual needs.

Advantages of an IVA

Protection of Assets
Generally speaking, IVAs are ideally suited to those who have large assets, such as expensive vehicles or property, which they want to protect. This is because, unlike with bankruptcy, these assets are not placed at direct risk under an IVA, and IVA proposals can sometimes exclude property entirely. As a result, you won’t usually be forced to sell your house.

Affordability and Security
With an IVA, the amount you pay is based on the amount that you are able to realistically afford. Once an agreement is reached, as long as repayments are met, there is no threat of further action from creditors.

Job Protection
Bankruptcy can have a huge impact upon a person’s career, often preventing them from taking jobs related to accountancy and law. Those who have been declared bankrupt are also prevented from joining the armed forces or police force, or from becoming the director of a company. In most cases, IVAs will not affect your job in this way.

Fewer Credit Restrictions
Despite being logged on your credit file for a period of six years, IVAs offer far fewer restrictions when it comes to accessing credit than bankruptcy.

Disadvantages of an IVA

Longer-Term Solution
Although an IVA can technically be any length, it will usually lock the debtor into monthly repayments over a period of several years, with five years being the most common time frame. By contrast, bankruptcy is usually discharged after a year.

Impact on Mortgage
People entering into an IVA will usually be free from the risk of losing their home, however, they will be expected to release a share of their equity and relinquish any endowment linked to their mortgage.

Linked to Income
While IVAs are affordable, they can be linked to income which makes it difficult for a person to improve their overall circumstances during the period of the IVA. Any improvements to income during the IVA period may lead to an increase in repayments and any bonuses or inheritance received must also be declared.

IVAs are recorded on the Personal Insolvency Register, which is available publicly.


An individual voluntary arrangement can be an incredibly useful means of solving debt problems and, for many people they may be the single best solution available. An IVA can help to protect your home and your career and is based on what you can realistically afford.

However, it is important to take note of the disadvantages and to understand that they are not a simple solution to problems. Serious consideration needs to be taken before entering into an IVA, as they are primarily an alternative to bankruptcy. For less serious debt problems, alternative options should be explored.

Payday Loans and the Debt Problems they Cause


Payday Loans and the Debt Problems they CausePayday loans have become increasingly common in the UK, and elsewhere, in the last few years. Particularly since the financial crisis of 2008, the number of people accessing these short-term loans has risen dramatically. Indeed, it is estimated that in the tax year running from 2011 to 2012, more than 8 million payday loans were taken out.

What are payday loans?

Payday loans are short-term loans of cash, typically of a relatively small amount of cash that do not require the same type of credit checks that larger loans need. Payday lenders are not required to check an applicant’s credit history. Such loans get their name as they are often used to pay bills and other outgoings at the end of the month before an individual’s next pay day arrives. They are available from high street shops and, more frequently, from internet sites. Payday loans are easy to access and the money is available quickly – some lenders will transfer the cash within 15 minutes of applying.


A largely unregulated area of the economy, payday lenders are renowned for the high interest rates they charge. Some lenders charge over 1000 percent.

Another area of contention is the disproportionate charges that can apply to a loan. For instance, high charges for late payment are a major cause of concern, as they are added to the debt and so increase the amount of interest to be paid. These and other charges are often hidden in the small print of the loan agreement. Customers may assume they are paying an advertised rate of interest but ‘hidden; charges can increase it substantially.


Debt problems arise when borrowers get behind on their repayments. Typically, if a customer does not repay their loan according to the terms of the loan agreement, the lender will roll the loan over onto another one (for instance, repackage the loan as a new, month-long agreement). However, this usually entails a fee, which is added to the debt, and a higher interest rate, making the new loan harder to pay off than the original.

Some customers take out a payday loan with another lender to pay back the first. This often leads to multiple loans and a chronic situation where the customer sinks further into debt while accruing extra fees and more interest repayments. If you are struggling with debt, contact an experienced debt advisor who will be able to help with where you stand legally and provide options for sorting out your problems. If you just require short term assistance to get over a particular issue then there are a number of simple options for this such as a debt management plan or debt consolidation loan. If however your problem is more serious you may have to get IVA debt advice or even advice on bankruptcy which are more formal debt solutions.

Seek advice early

The important aspect when you have a debt problem is to take action on it to get it sorted and not to be wary about asking for help. There are many debt advice organisations who can advise you on exactly what an IVA is for example and ensure you have the information to make the right decisions. You will generally find them helpful and considerate.

Payday loans can be a useful means of securing finance. However, customers should take care to fully understand the terms of the loan and ensure they have the funds to repay it in time. Individuals may also wish to explore other avenues of short-term funding, such as a loan from a credit union, and overdraft at a bank or, in times of great need, a loan from the government Social Fund. If you do decide to get a payday loan, shop around to find the best deal and be aware of the consequences of failing to repay the loan.

The lowdown on student debt


The lowdown on student debtSince student grants were introduced in 1962, universities got their biggest shake-up in the form of tripled fees and lower teaching funds. If the government didn’t increase tuition fees, many of the universities in England and Wales would have closed due to lack of funding. If you are a student struggling with debt, here are some tips on how to cope better.

It’s obvious but it works

Firstly, try not to spend your money on unnecessary things such as going to the pub with your friends. Don’t let your peers pressurise you into spending money when you don’t want to or cannot afford to. It takes real strength of character to say no, and this is important if you wish to reduce your debt problems. Almost every student worries about not affording to repay his or her debt, and this is coupled with the pressure of exams and paying household bills, which can all eventually take their toll on you.

As a result, it is little wonder that money issues are one of the main concerns students face. Most of the time, students struggle to fund their daily expenses and have to find ways to finance their accommodation, food, and studies. Therefore, the need to work with a set budget throughout your academic years is a necessity.

Take care with credit

With the ease of qualifying for credit cards, it is no wonder students make use of this form of credit and as a result many can find themselves facing serious financial problems. The high tuition fees also play a major role in dragging students further into debt. Aside from tuition fees, unexpected expenses, and there is often many of these, can also lead to further financial problems. In addition, without a regular source of income, it can be a nightmare trying to cope with increasing debt.

To plan your budget, you should allocate your money on the most important needs such as housing, food, and education. If you are left with a surplus, then consider using it to pay off any of your outstanding debt. It may also be a good idea to get a part-time job to fund your living expenses. Take a look at your university’s job listings to see what they can offer you.

Debt problems

If you are already facing financial problems then you need to consider what your options are to resolve things. Don’t let the problem lie as it will only get worse. You need to take action and the best thing to do first of all is some practical research to find out how to best sort the situation. Once you have this information and have a basic understanding of what it all means then you should check out the range of debt advice organisations that are available.

There is a wide variety of debt solutions available to students with financial problems and these can range from debt management plans and debt arrangement schemes to more formal solutions such as going for an IVA or registering a trust deed. If your debt problems are substantial and you are considering an IVA then make sure you get proper advice from an IVA company as this is an important decision to make.

Best advice is always to make sure you speak to an expert debt advisor who will take a look at the extent of your debt problem and advise accordingly.

The Main Causes of Debt


The Main Causes of Debt Theoretically, everyone knows what causes debt: spending more money than you earn. But in practical terms, most people find it challenging if not impossible to avoid accruing debt at some point in their lives. While it might seem embarrassing or make you feel like you aren’t good with money, it’s important to remember that debt is a common problem, and there are many factors in play that make it very easy to fall into the debt trap.

We live a society structure such that many purchases would be impossible without taking on a debt. Very few people can purchase a house or a car without some sort of loan or financing, and yet housing and transportation are things everyone needs. Even more modest purchases such as furniture and appliances can be expensive enough that financing is the only option. Of course loans and financing come with interest and payments, and we end up paying more for items in the end.

Credit and charge cards

In modern society, it is also hard to get by without a credit card. Online shopping is increasingly popular and many shops require credit card payment. Banks and credit card companies offer higher and higher credit limits and enticing bonuses for joining. It is easy to spend more than we can pay off every month, and credit cards are designed to allow this. The companies make more money from people who carry balances than from those who never owe a penny, so they encourage this behaviour.

Unexpected events

Even if we are careful, sometimes emergencies happen and we end up not being able to pay a bill, or having to charge more than we can afford to a credit card. A family emergency, a car break-down, a sick pet or a broken appliance – all of these things come up when we don’t expect them. In today’s economy many people can’t afford to save for these events, and end up scrambling to pay off the debt afterwards.

Of course sometimes we know we shouldn’t be spending the money we are, but no one is perfect. Maybe we are expecting things to improve and they never do, or maybe we are going through a rough patch and have no choice but to buy things on credit just to get through until the next pay day.

Take advice

Whether you think you have a problem controlling your spending or sticking to a budget, or you are just a regular person who fell on some bad luck, there is no shame in seeking debt advice and help, and there are many resources to help you do this. Make an appointment with an expert debt advisor and see what they have to say – they have experience and knowledge of all the main debt solutions available to resolve the majority of problems. Depending on the type and extent of your problem they will also take you through income and expenditure planning in conjunction with analysing the amounts you owe. This gives you a clear picture of how bad the problem is and helps to determine the best solution. There are organisations that provide debt help free so make use of their advice you’ll find it practical and helpful.

Debt is a common problem, and seeking help to overcome it is not something to be ashamed of.

Is Cosmetic Surgery a Good Investment or just the New Debt Creator?


Is Cosmetic Surgery a Good Investment or just the New Debt CreatorIt was quite an eye-opener to learn that borrowing money for cosmetic surgery is one of the biggest reasons for people getting into debt. And given that 90% of the people who have cosmetic procedures are women then it stands to reason that there are lots of gorgeous debt-ridden women racketing around the UK. Well, I suppose that depends on how good the plastic surgeon is and how severe the cosmetic problem was in the first place. But is cosmetic surgery worth getting into debt for? If it’s an investment where is the return except the personal psychological boost? And what’s the point of looking better if you’ve got no money left to go out and make the most of it?
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