IVA vs debt management
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The global credit predicament and economic meltdown have created an uncertain condition before us. Pink slips and instability in the job market have squeezed monthly income of the people. Credit chomp is a mighty blockade before approval of fresh credit. Hence, several case of growing debt leading to recovery has taken place during last two years. However, recovery is an extreme case and you can avoid it by resorting to a monthly budget-friendly repayment plan. To help you in this way, there are several financial tools like debt management, IVA and bankruptcy that are available in the financial market. We at Chance for Loans are assisting our customers and helping them to choose any effective tool according to their financial standings.
What is debt management?
A Debt Management Plan (DMP) is a repayment plan which helps in making unsecured debt repayment more affordable. In this plan, a debt management company brings less interest rates and easy repayment duration for the debtor.
What is IVA?
The term ‘IVA’ is referred to Individual Voluntary Arrangements which is a formal arrangement through the judges, set up by a Licensed Insolvency Practitioner and is intended to be an alternative to bankruptcy. It is a legal and government approved method of resolving arrears that shun the consequences of bankruptcy.
Debt Management verses IVA
Debt management is a valuable monetary tool while debt burden consists of unsecured loans and credit card bills. Through this plan, lenders provide the debtor a secured loan. That means, to pay off old debts you take another loan. The new loan has collateral clause and will lead to recovery if you can not pay back on time.
On the other hand, in IVA, you do not need to take another loan. In this method you as debtor have to pay a monthly installment. This monthly installment is prepared after calculating your debt burden, salary and expenditure.
In debt management plan, repayment period is short termed. During this period one has to pay back the entire loan amount with interest fees. While in the case of IVA, repayment term is five years. After this time period debtor is declared debt free even if he has not repaid the whole debt amount.
If you need more assistance on debt management and IVA, you can contact us without any hesitation. By simply filling our online form you can approach our experts.
