There are several ways to deal with the debt trap. Sometimes, debt climb up to such a height where tools like debt management, expenditure reduction become ineffective. In such a situation there are only two alternatives left. One, go for bankruptcy and the second is applying for IVA> An Individual Voluntary Arrangement (IVA) is a personal legal binding agreement between a debtor and the creditors. On the other hand,bankruptcy is publicly advertised in a local newspaper and the London Gazette. As the former is a personal agreement,it does not carry the stigma associated with a bankruptcy.

Unlike a Bankruptcy, the advantage of an IVA is that it does not compulsorily restrict to avail you any future credit. A bankruptcy confines an individual form having access to credit for a specified span of time. This provision makes the bankruptcy proceeding more painful as the credit history of the debtor is blemished forever. However, there are no such issues associated with an Individual Voluntary Arrangement. The borrower can get credit without any restrictions even after signing an Individual Voluntary Agreement.

The IVA loans service provides credit to an insolvent borrower to pay back the dues of the unsecured creditors by means of an Individual Voluntary Arrangement (IVA) contract. An Individual Voluntary Arrangement (IVA) is a mechanism used by a borrower to avoid bankruptcy proceeding against him in case of an inability to pay back the existing debts to his creditors. These loan services were introduced in the UK under the Insolvency Act of 1986 to allow a debtor to avoid bankruptcy proceedings and provide an alternate mechanism to take care of financial insolvency. The whole arrangement is a legal contract between the debtor and the creditors supervised by a licensed Insolvency practitioner that outlines the terms and conditions for repayment of an outstanding debt. This contract provides an alternate option to both the contractual parties for settling their dues in a fast, hassle free and effective way. You can avoid bankruptcy by opting for an Individual Voluntary Arrangement with your lenders under mutually agreed upon terms and conditions that are clearly specified in an IVA contract.

A debtor may pay a single monthly installment under IVA loans service for a period ranging form three to five years to settle his existing debts. After the stipulated time period, any remaining debt is waived by the licensed Insolvency practitioner thereby rendering the insolvent debtor totally debt free. IVA loans service helps facilitate a write off of up to three-quarters of the total debt of an insolvent borrower. This is suitable for those debtors whose total debts have crossed a limit of £ 15,000(including secured and unsecured). However, an IVA loans service requires regular repayments without failing on the part of the insolvent borrower. Any default in the repayment of the mutually agreed installment may lead an IVA supervisor to initiate bankruptcy proceedings against the borrower. This may render the whole purpose of going for an IVA futile.

The terms of agreement of an IVA loans service are such that an insolvent borrower is required to give as much as possible in a manageable way towards the repayment. In this way, this loan can provide access to additional financial resources during times of mounting debts and financial crisis.