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When debt management is concerned, you can have various options. One of the options is certainly debt consolidation. IVA is another option you may probably consider. However, which route you should choose is the question here.

Debt consolidation

With debt consolidation, you will try to move all your debts to one single loan. For example, if you have debts from a few credit cards, you may consider moving them to a single loan. The main benefit of it is of course you can repay your loan with a lower month payment.

In fact, the interest rate of the credit cards are usually very high. On the contrary, the interest rate can be a lot lower after debt consolidation. As a result, you will be able to pay less interest. In most cases, your credit scores or credit ratings will not be affected after debt consolidation. This can also be an advantage for you!

IVA

IVA stands for Individual Voluntary Arrangement. This kind of debt solution can help you to avoid bankruptcy. In fact, you should only treat bankruptcy as your last resort. In legal terms, it is an agreement that binds your creditors and you will probably be able make your repayments a lot lower.

Usually, the IVA solution practitioner will prepare a proposal on behalf of you. This proposal will be prepared based on your current financial situation. If your creditors agree to the proposal, you can start repay in a fixed monthly payment. And you will become totally debt free after you have repaid under the IVA agreement.

Both the about can be your solution in order to become debt free. You are moving the debts to a single monthly payment in the case of debt consolidation. IVA, on the other hand, is a solution that you are still paying to your creditors. However, you will need to fix a period of time, usually five years, for your IVA. And after this period, the remaining debt you owe the creditors will usually be wiped off.

You should consider your own financial situation before making the decision. You may also need to consult a financial planner to aid you to make the decision.