Debt Management vs. IVA
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Debt management is different than Individual Voluntary Arrangement or IVA in many ways. In this article, we are going to discuss some of the differences to see which is the best solution for certain circumstances.
With debt management, you are committing to repaying your debts in full. You can negotiate a better settlement, reductions, and interest freeze with your existing lenders, but the decision on whether to grant your requests is entirely your lenders’. IVA, on the other hand, allows up to 70% of your debts to be written off automatically after a maximum period of 5 years.
The minimum monthly payment for debt management is around £100. This is a very affordable amount, and you will be able to repay your debts without stretching your personal finance. The minimum monthly payment for IVA is set at £200.
You also need to meet the minimum debt amount of £15,000 with at least 3 creditors if you want to file for an IVA. Debt management usually doesn’t come with this term; most counseling agencies will help you if you have a minimum debt of £2,000 with at least 2 creditors.
It is clear that debt management is more suitable for smaller debts that you can repay in less than 5 years.
