Dramatic pictures of a ship sinking in the English Channel recently highlighted why many people will apply for an IVA this year: to avoid drowning in a sea of debt.
When cargo ship The Ice Prince sank off the south-west coast of Britain on 15 January, its crew were lucky: they had been airlifted to safety some 24 hours before. But many of the people watching the news pictures back in the UK will have been hoping the Ice Prince isn't a metaphor for their finances this winter – and will turn to an individual voluntary arrangement (IVA) to avoid drowning in a sea of debt.
Accountancy firm Grant Thornton predict that a record 120,000 people will go bankrupt or take out an IVA this year. And many more than that are all at sea financially – and are worrying that the sharks are circling. But, as the Daily Telegraph puts it, "There are ways to get back to shore".
IVA: wipe the slate clean
For many of the people fearful of being washed away in a growing spiral of debt, an IVA represents a chance to wipe the slate clean – by repaying a fixed portion of the debt, working to an agreed repayment schedule with their creditors.
Taking out an IVA often means that the full amount does not need to be repaid. Banks and other creditors will frequently accept an IVA that gives them 60 to 80 per cent of their money back when the alternative is for the debtor to declare themselves bankrupt, meaning they might not get a penny.
£1.3 billion IVA write-off in 2007
KPMG, another accountancy firm, recently announced that people in the UK were able to cut £1.3 billion in 2007 from the amount of debt they owed by taking out an IVA solution.
Many more people will be hoping they can reduce their own debts with an IVA in 2008.
Talk to Varden Nuttall about an IVA
Varden Nuttall has been established for more than 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an IVA. We employ 90 people, including trained and skilled IVA administrators, and are one of the largest IVA companies in the UK, where we handle more than three per cent of all individual voluntary arrangement applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.