Writing Off Debts: Is This Process Right for Me?

Writing off your debtis one way that debtors and creditors get rid of debts. When this process is done illegally, the collection calls and letters come into your mail constantly. When the process is done legally, usually through the process of an IVA, you avoid paying off debts. Know more about the steps required to write off unaffordable debts.

The Process of Writing off Debts
If you have mounting credit card bills, think about writing off debts through an individual voluntary arrangement (IVA).During this process, you are assigned aninsolvency practitioner who creates a money management plan for you. This professional talks directly to your creditors and determines what percentage of the debt should be written off. Realistically, you are not likely to write off all of the debts, but you can get 10% up to 75% written off if you are fortunate.

The participant of an IVA must agree to pay a structured settlement for a few years, usually five or sin. In the country of Scotland, this plan is known as a Protected Trust Deed. The entire process is legal and supported by established financial institutions.

If you adhere to the terms of your IVA, see results in your debts being eliminated.It is a total debt settlement that is another way of avoiding bankruptcy. However, you must follow all of the rules, which include mentioning all of the creditors to which you owe money.

The Benefits of an Individual Voluntary Arrangement

When you take out an IVA,you no longer worry about dealing with creditors.The banks and lenders who you owe money to are legally obligated to leave you alone. They are not allowed to contact you by phone or mail. These creditors must follow the precise terms of the IVA, which starts by removing a major chunk of your debt.

The average IVA lasts for 5 or 6 years, so you have plenty of time to pay the settlement. If you have equity stored somewhere, you can extend the payments by as much as a year. During this time, you will not be forced to sell your property or certain possessions. If you keep making good payments, you will expect to keep the vehicles at least.

An IVA carries more benefits than a bankruptcy. When you become bankrupt, you usually do not guarantee that you can make any payments. Your property and belongings are likely to be seized for repayment. With an IVA, you make an agreement to give the money back over time. At the least, you take the initiative to take responsibility for your finances.

The process of writing off your debts is not easily understood by many people, so you want to take the first steps carefully. Speak to your lenders and the credit card company about alternative options to paying your unaffordable bills. You may have a better chance by pursuing an IVA, but you will need the assistance of a financial expert by your side.