Individual Voluntary Arrangements and Trust Deeds

You may have heard of Individual Voluntary Arrangements (IVAs). But what are they and how can they help your financial situation?

Put simply, setting up an IVA could:

• Halt all legal action in force at present (including proposed or undischarged bankruptcy proceedings)
• Stop judgements, warrants or winding-up notices
• Stop debt collectors calling at your home
• Stop harassment by phone or letter
• Stop demand and default notices
• Stop pursuit by collection agencies

If an individual cannot afford their payments to existing credit commitments, they may be able to enter into a formal agreement setup by an insolvency practitioner. In turn, they will arrange monthly payments, usually over 5 years, that are affordable for the individual and acceptable for the creditors. From there, the debt is written off. This scheme is not suitable for everyone as it depends on such factors as the amount of credit you have, the number of companies you owe money to, equity if you are a homeowner, and affordable disposable income.

IVAs can also affect your ability to obtain credit for many years and only applies to the most severe of circumstances. Assets such as property, shares, savings and monthly contribution levels also need to be taken into account. Churchwood Financial has a policy of best advice, so we will discuss the advantages and disadvantages thoroughly before making recommendations.

For example:
Mrs Stevenson owed £23,900. Her arrangement was a 60-month term at £250 a month. So, she repaid £15,000 - around 62% of her debt. Remember, a successful IVA will also often avoid bankruptcy.

Trust Deeds are the Scottish equivalent of IVAs, and only available to residents of Scotland. At Churchwood Financial, we offer full advice on Trust Deeds. If you qualify, we can arrange a Trust Deed for you with your local insolvency practitioner.

If an individual is unable to afford their payments to existing credit commitments, they may have the chance to enter into a formal agreement setup by a fully licensed insolvency practitioner. This person will arrange monthly payments, usually over 3 years, that are affordable for the individual and acceptable for the creditors. From there, the debt is written off. Any interest and charges on your account are also stopped.

Suitability for these schemes depends on the amount of credit you have, the number of credit companies you owe, equity if you are a homeowner, and affordable disposable income. The law also dictates you must be a resident of Scotland to qualify for a Trust Deed.

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At Churchwood, we have helped over 80,000 people with a wide range of financial difficulties, and have over £245 million under management (as at March 2008). Our aim is to provide expert advice and a simple way of helping you pay off your debts. What's more, with combined industry experience of over 20 years within our management team, we have the resources and expertise to deliver quality financial services you can trust.

Churchwood Financial provides financial management information and resources for all individuals and businesses on the topic of debt help advice for workers in the United Kingdom. The site includes benefit information, debt facts, online calculators and consumer debt help advice articles. The guidance and/or debt advice contained within this website is subject to the UK regulatory regime and is therefore primarily restricted to consumers based in the UK in need of debt management advice. This site and all contents are copyright (c) 2003 - 2007 Church Wood Financial. Our number is NOT to be used for marketing purposes.