When you hear of an attractive debt management solution through which you can pay back your debts at your own pace without facing harassing creditors with minimal interest payment, it is no wonder that it would seem like an end to all your worries. Well, if you are a resident of England, Ireland, Wales or Scotland, your daily nightmares of unpaid debt will definitely come to an end with the Individual Voluntary Arrangement and Scottish Trust Deed debt management solutions.
Although both the IVA and Trust Deed are more or less similar in their features and working, the only difference is that an IVA is available to residents of England, Wales and Ireland while a Trust Deed is available only if you are living in Scotland. Both these debt management solutions provide a unique setup to the debtor wherein he can collectively pay off his debt to all the creditors through a fixed monthly instalment. This is done by routing it through an Insolvency Practitioner who is responsible for dividing the monthly payment among the various creditors in proportion to their debts.
When to go for an IVA
An IVA is a preferable option for you if you have a lot of unsecured debts. Unsecured debts are those against which you have not put any asset as security. For example, if you have taken a log book loan against security of your car, it will not be eligible for an IVA. However, payday loans and credit card loans are eligible for IVA.
The second thing to consider is the amount of debt you have. It is important to understand that an IVA is a legal agreement and once you enter into it, you name is entered in the public register for debts which negatively affects your credit rating. For this reason, any professional in the field will always advise you to go for an IVA only when you have a significantly large amount of debt due, generally more than 5,000 Pounds and when there is no chance in the future for you to pay off the debt within a reasonable time frame. If you are unable to make an accurate assessment of your debt situation on your own, you can visit the IVAPLAN website where the team of experts can analyse your financial status and give you honest advice on the best debt management solution for you.
When to go for a Protected Trust Deed
A Protected Trust Deed is available only to the residents of Scotland. Similar to an IVA, the eligibility criteria for a Trust Deed is an unsecured debt of at least 5,000 Pounds. Earlier, this limit was 10,000 Pounds but legislative changes were made after considering the number of people who had to declare bankruptcy simply because the option of Trust Deed was beyond their reach.
Trust Deeds have become a very popular debt management option, especially after the government has made sure that greater protection is given to the debtors. One step towards ensuring this has been to increase the time period of the Trust Deed from three to four years. Secondly, a Trust Deed always has to be executed by an Insolvency Practitioner. These Insolvency Practitioner charge their own fees for the services provided by them. According to the latest legislation, any Insolvency Practitioner or debt management company cannot have any hidden charges for their services. All fees and charges have to be disclosed to the debtor up front before the deed is executed so that he is not burdened with extra debt later on.
If you want an alternative solution to bankruptcy while also ensuring that you get to keep your house and other asses, a Trust Deed might be the best possible solution for you. What has made Scottish Trust Deed even more attractive is the fact that it takes only a few days and minimum formalities to set up. Once you hand over your case to the Insolvency Practitioner, it becomes his duty to make analysis of your financial situation and deal with your creditors.
IVA and Trust Deed are two really great debt management solutions because of which you will never again have to worry your head over what to do when you have no money to pay your debts.