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IVA

An IVA (Individual Voluntary Arrangement) is a formal debt solution which is suitable in a wide variety of circumstances. To find out if you could benefit from this solution, continue reading or get in touch with one of our experts.

What is an IVA?

An IVA is a legally binding agreement between you and your creditors designed to help repay your debts at a rate you can afford. To qualify, you should have debts totalling around £7,200, have more than two creditors, and around £100 left over each month to go towards repayments. However, these figures are not completely rigid and may be negotiable.

As with all debt solutions, to enter into an IVA you will need to complete a full income and expenditure review. This will be done with a financial adviser to determine how much you can afford to pay back to your creditors each month.

Once the IVA is complete – which usually takes around five years – any remaining unsecured debt is written off.

 

IVA pros and cons

There are several advantages and disadvantages to an IVA compared with other financial solutions. We have detailed some of these below:

 

Advantages of an IVA

 

  • Any debts remaining on your account will be written off upon completion.
  • Repay your debts through one, affordable payment which is tailored to your circumstances.
  • Prevents creditors from taking legal action
  • Your creditors are legally bound by the terms of the agreement.
  • An IVA allows protection of your assets and property
  • All charges and interest will be frozen on your accounts.

 

Disadvantages of an IVA

 

  • An IVA will display on your credit file and affect your credit rating for six years.
  • You may still find it difficult to obtain credit once your IVA has finished.
  • An IVA is listed on the Insolvency Register for 3 months after you have completed your IVA.
  • When you are on an IVA you cannot obtain credit outside of the arrangement, including current overdraft facilities.
  • Homeowners may be required to release equity in their home.
  • Failure of an IVA can result in creditors petitioning for bankruptcy.

 

Where can I get help and advice?

If you decide an IVA is the right debt solution for you, we will work in conjunction with our preferred IP (Insolvency Practitioner) to create a formal agreement between you and your creditors.

For more information, get in touch today. We help hundreds of people every day and can also assist you in dealing with your debts.

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