IVA and Debt Consolidation are both two very different debt solutions. Therefore it is essential that you seek expert IVA or debt consolidation advice to understand which of these two debt solutions is right for you.
A debt consolidation loan is when a borrower takes out a loan to repay their existing debts. This leaves you with just one payment to make as all of your other debts will have been repaid with this new loan.
An IVA is not a loan; it is a formalised agreement between the debtor and their unsecured creditors. The debtor agrees to repay a set amount for an average of 60 months. Any unpaid debt will be written off on completion of the agreement.
IVA and debt consolidation – Similarities
IVA or Debt Consolidation can both:
- Lower your monthly payments.
- Consolidate your existing unsecured creditor payments into one.
- Failure to make payments to either of these debt solutions could potentially lead to bankruptcy.
IVA and Debt Consolidation – Differences
It is important to remember that there are differences between an IVA and a Debt Consolidation:
- Only an IVA allows you a certain amount of debt write off, whereas all your debts will have to be repaid with your debt consolidation loan.
- The criteria of getting accepted if different. You could choose to consolidate debt with an unsecured loan or a secured loan, however an IVA is not a loan and is only suitable for those who fit certain strict criteria and is agreed to by the existing creditors.
IVA or Debt Consolidation?
– Which is right for me?
The above only outlines some of the main differences and similarities between IVA and Debt Consolidation. The only way to truly understand whether it is an IVA or Debt Consolidation which is right for you is by getting professional debt advice.
One Advice have a team of debt advisors who can tell you which is the best debt solution for you, either an IVA or Debt Consolidation, or perhaps an alternate debt solution. Please contact us today for further debt advice.