Tuesday, December 8, 2009

A unique debt plan for parents in the UK

Posted by Ahmed Al-Salem

A new survey has revealed that mothers, rather than fathers, are more stressed about the arrival of a new baby. The expense of expanding a family means that parents turn to unsecured debt and constantly rely on credit cards and personal loans. This will not help a family’s future financial security.

A unique debt plan that targets parents who are in trouble is an IVA. An IVA or Individual Voluntary Arrangement, is a fixed term repayment plan, designed to allow someone with serious debt problems the opportunity to repay their creditors whilst avoiding bankruptcy.

A new poll from Aviva shows that a fifth of first-time dads are sorting out family finances during their partner’s pregnancy, while over a quarter are worried about the dent in their household coffers in the first six months of their child’s life.

Louise Colley, head of protection for Aviva, says: "As a parent myself, I found that some basic financial behaviours can help you to feel much more in control and prepared for supporting a baby."

An IVA is a formal agreement, which first came into force on 29th December 1986 as part of the Insolvency Act 1986, bringing with it major changes to personal insolvency in the UK.

IVAs are available to all people who live in England, Wales or Northern Ireland. People in Scotland have their own version of the IVA, which is known as a Scottish Protected Trust Deed.

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