Debt Management Plans are set up for each individual and is based on what can actually be afforded on a monthly arrangement. Normally an updated income and expenditure amount will be taken to show where monies are currently being spent. The idea will be to establish a disposable income, the amount left over when all commitments have been made, in order to make an arrangement with your creditors.
Your Debt Management Company will assume control over your debts and manage any correspondence and/or phone calls to ensure the debt is repaid and you are no longer being harassed by your creditors.
This is a completely informal arrangement and means you can change it any time. We also have a further option regarding Debt Management Plans – ask our consultants for details.
INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)
Individual Voluntary Arrangement or IVA for short is basically a formal debt Management Plan
To arrange one of these it has to be done by an Insolvency Practitioner (IP), which is a form of debt solicitor. Two thirds of your creditors have to agree for you to be accepted on this arrangement. Normally this has to be a minimum payment, although it could be higher based on the amounts you owe.
Subject to acceptance the IVA would be in place for 60 months (5 years). However it is recorded on your credit file for 6 years and if you default on your payments its possible you could be made bankrupt, however if you complete the arrangement the remainder of any debts would be written off.