What is an IVA?
An IVA - which stands for Individual Voluntary Arrangement - is an insolvency solution available in England, Wales and Northern Ireland.
If you're struggling to repay a significant amount of unsecured debt - for example, on credit cards, loans and overdrafts - an IVA could help you repay as much as you can afford over a period of five
years (typically). Once you've successfully completed your IVA, any remaining debt in your IVA will be written off, although any debt not included in your IVA will remain outstanding.
How could an IVA help me?
Once an IVA is agreed, you'll have a clear route out of unsecured debt - with payments you can afford over a realistic timeframe.
Entering an IVA means you will:
- Make single monthly payments, designed to fit around all your essential outgoings (from your Council Tax to food)
- Have interest and charges on your debts frozen (in most cases)
- Be able to stay in your home if you're a homeowner (though you may have to release equity)
- Know the date you'll be free of your unsecured debts - usually after 5 years
- Get dedicated expert help and guidance along the way.
IVAs: what are the facts?
If you have several unsecured debts - such as credit cards, overdrafts and personal loans - that you can't afford to repay in full in a period your lenders consider reasonable, an IVA could let you repay
as much as you can afford.
Here are some facts about IVAs:
- As long as you keep up with all your payments, and stick to the terms agreed in your IVA proposal, you'll be free of your unsecured debts in 5 years (in most cases).
- Unlike bankruptcy, entering an IVA won't affect things such as your career, and you'll be able to stay in your home if you're homeowner. You may have to release equity in your final year and you may
find it difficult to remortgage or if you are successful, you may pay a higher rate of interest. If you are unable to remortgage, your IVA could be extended.
- Your lenders won't expect you to repay any more than you can safely afford each month towards your IVA. Your payments will be calculated to leave enough room for all your essentials - from food and
travel costs to heating & lighting - so you should still have room in your budget for the things you need.
- An IVA will affect your credit rating for six years, but once it's successfully finished, you'll be able to start taking steps to improve your finances for the future. You need to ensure that you can
meet your repayments because if your IVA fails, this may lead to bankruptcy.
Do I qualify for an IVA?
Different debt solutions are designed to help borrowers in different situations - which means an IVA won't be suitable for everyone.
You could be eligible for an IVA if:
- You have more than one unsecured debt
- You can't repay your debts in a reasonable timeframe
- You can pay a reasonable amount towards the IVA every month
- You live in England, Wales or Northern Ireland
If you're not sure if an IVA is right for you, our debt solution finder could help you find a suitable approach to getting your debts back under control.
How could I get an IVA?
An IVA is a formal agreement between you and your unsecured lenders. This means that once it's approved, both you and your lenders will be expected to stick to all the terms by law.
This being the case, an IVA can only be set up with an Insolvency Practitioner (IP): someone licensed and regulated to act in insolvency cases.
Bear in mind that an IVA solution will only be recommended if it's the right step for you - and that all depends on your finances. If your IP thinks an IVA is suitable for you, they'll draw up an IVA
proposal based on the information you provide, e.g. what types of debt you have, how much you owe in total, etc.
Your IVA proposal will show your lenders how much you can reasonably afford to pay into your IVA every month. But it won't just take your interests into account - it'll also consider your lenders' too,
showing them how they'll get back a fair amount of what you owe overall. So even though you'll be making smaller payments, there's a good chance they'll accept your IVA.
Your IVA will go ahead as long as the majority of your lenders (that is, those who represent 75% or more of the total amount you owe) agree - which means as long as you stick to your side of the
agreement, you'll be free of your unsecured debts in five years.
Have we answered all your IVA questions?
If you have a question about IVAs that you want answering, our experts could provide the information you need.
Here at All About Money we are part of the Think Money Group - who have almost 20 years' experience helping people to find the best way of dealing with their debt problems, and we could help you get the
answers you're looking for when it comes to getting the right debt solution for you.
Is an IVA right for me?
Our easy-to-use IVA calculator can help you decide whether an IVA could be right for you - or if another solution would be more suitable. All you'll need to
do is fill in a simple form.
Even if an IVA isn't the best way for you to get back in control of your debt problems, we can recommend a suitable alternative.
Why choose an IVA with us?
We are part of the Think Money Group who have almost 20 years' experience helping people deal with their debt problems. We help thousands of people every day with expert debt advice - and we offer a
range of professional solutions, including IVAs, that could help you.
We have the long-standing expertise and knowledge to help you find the right solution for you - and with our great working relationships with lenders, we'll only recommend an IVA solution for you if
it's likely to be approved.
You can rest assured that when you contact us, an IVA expert will discuss your situation with you and answer any IVA questions you have: no obligation; no pressure; just advice you can trust.
Moreover, we understand that everybody's situation is different. Even if an IVA isn't suitable for you, we could recommend an alternative option that is - so you can begin to tackle your debts and get your
finances back in order.
Get expert IVA adviceIf you would like more information, talk to our team today.
Top of page
