Government Debt Management

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Government Debt Management

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What Is Government Debt Management?

For people in the UK who suddenly find themselves unemployed through no fault of their own, there are a certain number of benefits such as Job Seekers Allowance. This is a form of benefit provided by the UK government for unemployed individuals who are currently seeking work. But what if you are currently employed, but you find yourself is very serious debt that has grown to the point where you can never pay it all back?

Are there any government initiated schemes that are designed to address this situation? Basically, the nearest thing there is to a government debt management scheme is called an IVA or the Individual Voluntary Arrangement. Read on to find out how it works, what its benefits are and how it can help you out if you find yourself in a tight financial bind despite having a steady income.



IVA: The Basics

What has an IVA to do with the government It was introduced by the UK government in 1986 as part of the Insolvency Act and it serves as a viable alternative for individuals who are considering filing for bankruptcy. As you may already know, filing for bankruptcy will have drastic effects to your lifestyle and finances. This is the reason why you need to look for viable alternatives before declaring yourself bankrupt, which is where the IVA comes in.

As a form of government debt management scheme, it was actually first introduced as a way to help small business owners climb their way out of debt. Over the years, the rules surrounding filing for IVA have been modified in such a way that even private individuals who are contemplating for bankruptcy can consider filing for the agreement.

How Does An IVA Work?

As a government debt management scheme, the IVA works in such a way that any individual taking advantage of it would have a legally binding way to reduce the monthly dues that they have with their creditors. Let us say that you owe a significant amount of money in the form of unsecured loans to three creditors. Once your IVA application has been approved, up to 75% of your unsecured debts can be written off. Any legal action taken by your creditors against you can also be put a stop to under the Individual Voluntary Arrangement. In the same vein, any interests, late charges or other fees relating to your debts can be frozen.

Pros And Cons Of An IVA

Now that you already have an idea about how an IVA works as a government debt management scheme, what are its pros and cons? As mentioned earlier, up to three quarters of the debts that you owe can be written off once your request for the IVA has been approved. If you are in serious debt, the IVA is definitely a viable solution because a huge percentage of your debt’s load will be taken off your shoulders.

The downside to the IVA is that the period in which the agreement is implemented lasts for five years. Once your debts have already been written off as part of the Individual Voluntary agreement, it will have a negative effect on your credit rating which may last for up to six years.

Who Should Take Advantage Of An IVA?

Finally, who should take advantage of IVA as a government debt management solution? There are a few conditions that apply for it, including:

If you fulfilled all the conditions and your IVA application has been approved, there will be an Interim Order issued to your account. This is when the conditions for the IVA will be laid out and the agreement lasts for up to five years. At the end of the period, you can become totally debt-free since majority of your debts would have already been written off.

You can apply for an IVA through any reputable UK debt management company. Just fill out the form below and an advisor will get straight back to you to see whether you may be eligible.




Complete This Simple Online Form For A Free Review By An Advisor From Our Recommended Debt Company, 123 Debt Solutions
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You Can Use This Form To Apply For Trust Deeds, IVAs, Debt Management Plans or Debt Consolidation Loans



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