What is an IVA?
An IVA is a way of dealing with your debt, protecting your assets and avoiding bankruptcy. An Individual Voluntary Arrangement (IVA) is a private, legal contract between you and your creditors.
How much you pay in to your IVA is dependent on your own personal circumstances.
How IVA’s work
An IVA should be based on what you can reasonably afford to pay back, it should be your best offer. If your IVA is based on monthly payments, it normally lasts for 5 years.
You make regular payments to an authorised debt specialist called an ‘insolvency practitioner’ (IP). They share this money out between your creditors as agreed in your IVA.
Once your IVA payments are completed, and if you have co-operated fully, meeting all the terms of your IVA, any remaining debt is legally written off.
Is an IVA right for me?
Entering into an IVA is a big step and involves careful consideration. An IVA will only work if you are fully committed to making your payments and it is a genuine reflection of your circumstances.
If you feel that the following statements apply to you, an IVA may be a solution that you can explore.
- are unable to pay your debts as they fall due;
- have unsecured debts of £6,000 or more;
- have at least one creditor with two or more lines of credit;
- believe your budget shows a monthly surplus (after all household & living expenses) of £100 or more.
It is important that you get independent financial advice on all of your options before considering an IVA.
Benefits of an IVA
- Release from stress and worry of problematic debt;
- A private, legally binding contract that stops contact and harassment from creditors;
- Interest and charges are immediately frozen upon IVA approval;
- Single affordable payment or lump sum offer;
- Partial debt write-off*;
- Supervised by a licensed Insolvency Practitioner;
- Free from uncertainty; an IVA has a definitive beginning, middle, and end;
- Peace of mind and the opportunity for a fresh start;
*dependent on individual circumstances
Disadvantages of an IVA
- If you fail to make your IVA payments, your IVA could fail;
- You are unable to avail of any additional credit during the life of your IVA;
- Your credit rating will be impacted.
Get in touch
We have been helping people to become debt free for over 25 years.
If you think that an IVA might be a good option for you, get in touch to find out more information and arrange a call from one of our specialist debt advisors.
Arthur Boyd & Company | Professional debt advice you can trust.