Government Debt Solution – Getting Help With Debt Problems
The vast majority of debt solutions are provided or facilitated by private companies, with government involvement being very limited. In the US there are a certain number of federal consolidation loans available, particularly aimed at students with serious debt, but these are to a large extent just replacing a series of smaller debts with one big one. In the UK there are no schemes directly run by the state, but the government did set up a scheme called an Individual Voluntary Arrangement (IVA) in 1986 to provide an alternative to bankruptcy.
The scheme was originally aimed at small businesses and intended to reduce the number that were going bankrupt by providing an alternative debt solution. It has evolved over the years and is now one of the most widely used systems for dealing with serious consumer debt problems in the UK.
The idea of this government debt solution is to make it possible for people in very serious situations to become debt free without the drastic step of filing for bankruptcy. It is a way of wiping out a large part of the debt you owe without the stigma and some of the more serious consequences of becoming bankrupt.
The main difference between this government debt solution and other options such as debt management plans is that an IVA is a formal and legally binding agreement. One of the advantages of this formality is that if you can get 75% if the creditors to agree to setting up the IVA, the remaining creditors have to go along with it even if they object. With a debt management plan you cannot force any creditor to join in who does not want to.
