How an IVA Sorted my Debt Nightmare

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How an IVA Sorted my Debt NightmareLike many small business owners, I was hit extremely hard by the economic crisis. I thought it prudent to borrow what was actually a significant sum of money to re-tool my small workshop; imagining that such an action would improve sales. In short, I was wrong. Not only did my business continue to lose money, but I owed much more to my lenders than I had in the past. What followed was what I can now only call a downward spiral of events.

From Bad to Worse

I tried to make ends meet without success. I was forced to lay off staff and downsize considerably. Still business did not improve and like many other enterprises, the mountain of debt only seemed to increase. Late payments caused my interest rates to soar. My overdraft balance began to increase dramatically. I had very few options, as my credit had been severely damaged. Therefore, I was unable to secure even a short-term loan to pay off these multiple debts.

Of course, there was also a certain amount of procrastination on my part. I felt ashamed at having made what I thought to be a poor business decision. I found it difficult to speak with my friends in regards to my financial situation and even my wife did not know the full extent of the damage that had already been done. This was quickly made clear when the creditors began calling my home and office.

I began to worry that my personal assets (the house, the car and a small boat) could very well be seized. My credit cards had reached their maximum limit and my bank account was dangerously low on funds. I took the decision to close the business as it just wasn’t generating enough income to cover the costs along with the debt repayments. However because I was trading in my own name a proportion of the debts fell to me personally. I was definitely up against it and didn’t know where to turn. Thankfully, a friend of mine informed me of what is known as an IVA.

The Process and Advantages

I first met with an IVA advisor. He carefully scrutinised my situation and fully assessed my income, assets, expenditures and debts. He also explained to me that bankruptcy was an option (although I did not wish to consider such a position). By examining all of my financial resources, he was able to determine the realistic amount of money each month that I was able to pay to my numerous creditors. He gave me the extra help with debt I needed and drafted a payment proposal that was sent to these firms. After approximately two weeks, all of my creditors had the opportunity to consider the payment proposal and they all agreed to accept it.

I could not believe how my position had changed. Not only was I able to reduce my monthly payments to a single payment that I could actually afford but I was even able to write off a significant amount of my initial debt (nearly half of the total). It was even more reassuring when I learned that my home was protected, although I had to sell the boat, and the harassing phone calls would stop. This IVA allowed me and my family to return to solid ground. I was more easily able to manage my financial difficulty and through my IVA, I am happy to say that I have once again found myself free from the nightmare of uncontrollable debt.

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