Debt Little Known Piece Of Government Legislation

	Do you live in Scotland? As Scotland has its own legal system, distinct from that of England and Wales, laws relating to bankruptcy are different too. In Scotland, personal bankruptcy is known as sequestration.

	Is there really "a little known piece of government legislation" that will write off up to 80% of all my debts so that I won't be declared bankrupt? NOTE: If you have serious problems with debt and are considering bankruptcy, it is important that you seek professional advice before doing so. If you watch daytime TV or listen to the radio, you will no doubt have come across various advertisements offering to help you write off up to 80% of your debts using "a little known piece of government legislation". Such adverts are referring to an Individual Voluntary Arrangement or IVA. An IVA can help you reduce your monthly payments and the total amount you are required to repay. Banks and other lenders make provision for loans that are never repaid - known as bad debt provision - and are sometimes willing to write off part of a debt in return for the rest being repaid over an agreed period. The maximum a lender will usually agree to is 80% of the outstanding amount, with the remainder to be repaid at regular intervals over a period of up to five years (60 months). A creditor must agree to the terms of an IVA before it becomes legally binding, and the amount that will be written off will depend very much upon your circumstances and ability to repay the outstanding amount. According to KPMG, more than 18% of IVAs put forward in the first three months of 2007 were rejected by lenders - nearly double the rejection rate of the same period a year ago. But even so, lenders did write off an estimated £1.4 billion of outstanding debts in 2006 for people who entered into an IVA. If you do obtain an IVA and made payments to your creditors as and when required, you would avoid bankruptcy. If however you know that you will not be in a position to make such payments, bankruptcy may well be a better option. Would you qualify for an IVA? Take the 60 second debt test at Cut Your Debt by clicking here and find out.

Is there really "a little known piece of government legislation" that will write off up to 80% of all my debts so that I won't be declared bankrupt?

NOTE: If you have serious problems with debt and are considering bankruptcy, it is important that you seek professional advice before doing so.

If you watch daytime TV or listen to the radio, you will no doubt have come across various advertisements offering to help you write off up to 80% of your debts using "a little known piece of government legislation".

Such adverts are referring to an Individual Voluntary Arrangement or IVA.

An IVA can help you reduce your monthly payments and the total amount you are required to repay.

Banks and other lenders make provision for loans that are never repaid - known as bad debt provision - and are sometimes willing to write off part of a debt in return for the rest being repaid over an agreed period.

The maximum a lender will usually agree to is 80% of the outstanding amount, with the remainder to be repaid at regular intervals over a period of up to five years (60 months).

A creditor must agree to the terms of an IVA before it becomes legally binding, and the amount that will be written off will depend very much upon your circumstances and ability to repay the outstanding amount.

According to KPMG, more than 18% of IVAs put forward in the first three months of 2007 were rejected by lenders - nearly double the rejection rate of the same period a year ago. But even so, lenders did write off an estimated £1.4 billion of outstanding debts in 2006 for people who entered into an IVA.

If you do obtain an IVA and made payments to your creditors as and when required, you would avoid bankruptcy. If however you know that you will not be in a position to make such payments, bankruptcy may well be a better option.

Would you qualify for an IVA? Take the 60 second debt test at Cut Your Debt by clicking here and find out.

© Bankrupt.co.uk 2007, 2008. All rights reserved. Please note the contents of this website are for information purposes only and do not constitute financial advice. Please seek independent professional advice before taking action that may affect your financial well-being.