Facts about IVAs

As with any debt solution, it is important to understand both the benefits and the consequences. At All About Money, we won't recommend an IVA unless we're convinced that it's right for you - that the benefits outweigh the drawbacks in your case.

If we don't think an IVA is the answer, there are alternatives. You might be better off joining a debt management programme or consolidating your debts with a loan or remortgage. Either way, All About Money can help.

Before you go any further, take a look at these questions:

• Do you have significant unsecured debts (around £15,000 or more) to various creditors?
• Are you unable to meet your monthly repayments?
• Do you have a reliable income - can you afford to make a regular payment to your debts for the next 5 years?
• Are you a resident of England, Wales or Northern Ireland?

If you answer 'no' to any of these, an IVA probably isn't the answer to your debt problems - call us on freephone 0800 195 2911 and find out which debt solution is right for you.

If you can answer 'yes' to all four questions, an IVA could well be the ideal solution for you. However, it's important that you understand the pros and cons:

Pros of an IVA

• Legally binding agreement
• Upon successful completion of the IVA, your unpaid unsecured debt is written off
• Have one monthly repayment tailored to your circumstances
• Potential to stop interest on your debts
• Know exactly when you will be debt free
• Legal protection from further action by your creditors
• Avoid the social stigma and financial consequences of bankruptcy
• Protect your career - no statutory restrictions on employment (as with bankruptcy)

Cons of an IVA

• Requires commitment - regular payments must be made for the full term (normally 5 years)
• You can't take out further credit while your IVA is running
• You may be made bankrupt if you do not stick to the terms of the IVA
• You may have to:
  • Remortgage to release a proportion of the equity in your property
  • Pay extra if you earn a bonus or overtime
  • 'Trade down' to a cheaper vehicle or sell other valuable assets
• You will repay more of your debt through an IVA than you would through bankruptcy
• Your IVA will stay on your credit file for a year after its successful conclusion, which may make it more difficult for you to get credit
• Any unsecured debt not included in your IVA will remain outstanding

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Subject to eligibility and acceptance. Fees Payable. Debt write off applies only to unsecured debts and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for 6 years. Homeowners may be required to release the equity in their property. Calls may be recorded. Calls to 0800 numbers from BT landlines are usually free, calls from other networks may vary and you should check with your network provider for full details of your service.