When a person is under the stress of trying to deal with debt, it may be difficult to decide which solution is best. Some people are very confused about the IVA debt solution and exactly what it is. They may be curious to know if this it is the answer to their debt problems. It very well may be if certain circumstances are existent.

An IVA debt solution is a way for the consumer to get debt lowered by proposing an agreement to the lenders based on financial ability to pay them back. It is something that is entered into solely by the discretion of the borrower. It is completely voluntary and it could work to minimize debt. Creditors do not have to accept such agreements, but they generally do because they know they will receive more money back than they would if the individual were to file for bankruptcy status.

In order to qualify for an IVA debt solution, one must have at least £12,000 of debt. He or she must also have open accounts with two or more lenders. Also, the agreement must state that the applicant is willing to make payment of at least £150 per month toward these debts. In addition, the applicant must have a source of income that is not all benefit based.

When deciding whether an IVA debt solution is appropriate, one must consider his or her circumstances. A person who is unemployed and only receiving an unemployment check every week would not be a good fit for this program. An individual who does not have £150 worth of disposable income to make payments to the creditors would not be eligible for an IVA debt solution.

Even if all criteria are met an individual still may opt not to use an IVA debt solution. Entering into an IVA debt solution will damage the person’s credit for approximately five years. If the debtor does not wish for his or her credit status to be affected, there are other options that should be considered. It also could possibly be too difficult for him or her to make the payments every month with the IVA debt solution. In a case like this, that individual would be better off filing for bankruptcy.