Only half of struggling borrowers have heard of IVAs, a report from insolvency trade body R3 indicates.

R3 has estimated that around 220,000 people are currently in a formal insolvency procedure (such as bankruptcy or an IVA). A further 500,000 are in debt management plans, 574,000 are struggling, but have ‘contacted their creditors informally’. And 961,000 people are struggling with their debts but haven’t yet looked for help with them.

R3′s report, called ‘Struggling with debts without help’, looks at that fourth group.

It ‘explores the views and experiences of individuals at the very bottom of the personal debt ‘iceberg’ – those who are struggling without help’.

The report covers a lot of subjects, like why those people haven’t sought debt advice, what they’ve done about their debts, and how things like age and gender affect attitudes.

Among other things, the borrowers were asked about their awareness of the options that might be open to them. Continue reading…

If you have a bad credit rating, your ability to access certain debt solutions might be affected. However, an IVA (Individual Voluntary Arrangement) is different.

How an IVA can help

An IVA is a debt solution aimed at people who cannot see any realistic way of repaying their debts within a reasonable period of time.

It is a legally-binding arrangement with your lenders in which you will agree to repay a set percentage of your debts, and write off the rest.

On an IVA, you`ll make regular payments (usually monthly) towards your debts, based on how much you can afford. This will normally continue for five years, and on successful completion you will be legally debt-free.

There are some things you should be aware of before you go ahead, though.

Continue reading…