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IVA

Do you have debts of more than £6,000? Can you afford to pay £60 per month? An IVA could be a good option to help clear your unsecured debts.

What Is An IVA?

An IVA, or individual voluntary arrangement, is a legally binding debt solution that forms an arrangement between you and your creditors.

IVAs are for people who can no longer afford to make their monthly repayments to their creditors in full, but can afford to make a reasonable offer.

Pros and Cons of an IVA

  • The lack of stigma or publicity attached to bankruptcy.

  • If you run a company, you can continue to trade and provide income to fund the IVA.

  • An IVA is drawn up to meet your particular situation. This ensures that assets, such as the family home, can be excluded so long as the creditors agree.

  • Unsecured creditors who voted against the IVA will still be bound by it.

  • One reduced monthly payment to your creditors.

  • A court order will stop any legal action by your creditors.

  • Telephone calls and letters from your creditors will stop.

  • Interest and charges are stopped, so the spiral of debt is halted.

  • Fixed repayment method (normally 5 years) at the end of which all your unsecured debts are discharged.

  • Unlike bankruptcy, details of an IVA are not openly published: it is a confidential arrangement between you and your creditors. Employers and landlords are not informed.

  • If you fail to comply with the terms of the arrangement, your home / assets can still be at risk if they have not been specifically excluded from the proposal.

  • If the IVA fails as a consequence of you not meeting your obligations under it, it is likely that you will be made bankrupt at this time.

  • You should have a minimum of 2 unsecured creditors and unsecured debts of at least £6,000 for an IVA to be a suitable option.

  • Assets are at risk if the creditors do not agree to exclude them.

  • You will be closely monitored by the supervisor during the period of the IVA and will have to report any changes of circumstances.

  • Your credit rating will be affected for 6 years.

  • If you own a property, and during the period of the IVA the property has equity available, then the creditor can insist that some of this equity be released to further help settle the debt.

IVA - Individual Voluntary Arrangement

IVA FAQs

Who Can Apply For An IVA?
If you have debts of £6,000 or over, and you have a monthly disposable income of £60, you can apply for an IVA.
Will My House Be Safe?
Yes it will be, but if you have any equity in your home this will be taken into consideration at some time during the arrangement.
If you have a partner with a share of the equity and they have no debts in the arrangement then that share of equity will not be touched.
Will My Debts Be Frozen And My Total Debt Reduced?
Yes, the IVA is an effective instrument that can be used to deal successfully with multiple debt problems, without the need to petition for your own bankruptcy.
Can My Spouse And I Start An IVA Together?
Yes, many couples use a 'joint IVA' to help with the relief of their debt burden. A joint IVA is no different to a single application, except both partners' debts are in the solution.
Can I Cancel The IVA Once It Is Up And Running?
No, it is a legal process and you cannot just cancel it if you change your mind.
Do I Have To Tell My Partner That I Am Doing An IVA?
No, but we would normally advise that you do.
Can I Still Operate My Business?
There are no restrictions on your business, unlike bankruptcy.
Will My IVA Become Public Knowledge?
No, it is confidential and only your creditors will be aware of your situation.
How Long Does An IVA Last?
An IVA normally lasts about 5 years, but this time can vary depending on each individual's circumstances.
What is an IVA?

Debt Resolution ForumConditions apply. Calls may be recorded for quality purposes and training. Dependent upon the solution provided fees may be payable. Repaying debt over a longer period may increase the total amount to be repaid. Your ability to obtain credit will be affected in the short term and maybe in the medium to long term. If you are struggling with debt, try our debt test.