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Individual Voluntary Arrangement - IVA

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Individual Voluntary Arrangement - IVA

Designed by Government Legislation an IVA is designed to help people to regain control of their finances.

If you are struggling with over £6000 worth of debt then an IVA may well be an option that could get things back under control. 

Put simply, an IVA is a legal agreement between you and your creditors that will allow you to pay back only what you can afford, over typically 60 months and the remaining debt is written off. 

  • Write off debtAs much as 80%
  • Reduce monthly repaymentsAlways affordable
  • Freeze interest and chargesSo your debt stops getting any bigger

How does an IVA work?

The whole idea of an IVA is that people should be able to resolve their debts without struggling on for years and years. IVAs are legal agreements, which is good news because it ensures that your creditors have to stick to the new terms of your debt repayment.
Consolidate Your Debts
All of your debt and debt repayments are consolidated into one monthly payment to make things more manageable.
Reduced Monthly Repayment
We calculate a new affordable monthly repayment. This is based on your income and your monthly expenditures so it will always fit into your household budget
Interest & Charges Frozen
To ensure your debt is not getting any bigger, your creditors have to freeze the interest and they can't put on any extra charges.
Protection From Creditors
An IVA is a legal agreement so as soon as it is in place your creditor can no longer contact you. No more letters, no more calls and no more knocks on the door.
Typically Debt Free in 60 Months
You make your monthly payment, once a month for typically 60 months (it can be longer) and then the IVA is completed and you are free from all of the debt included on the IVA.
Write off Unaffordable Debt
Once you have made your 60 monthly payments the IVA finishes. There will be debt left over which you will not have to repay. This can be as much as 80% of your debt.

Example of an IVA:

This is a before and after example of an IVA. Everyones situation is unique but this will give you an idea of how your monthly repayments would decrease, the amount of time before you are debt free would reduce and how much debt you could write off.

Before an IVA:

Total debt: £18,000
100%
Monthly Repayments: £643
100%
Time in debt: 13 years
100%
Debt written off: £0
1%

After an IVA:

Total debt: £7,200
40%
Monthly Repayments: £120
19%
Time in debt: 60 months
38%
Debt written off: £10,800
60%

The downsides to an IVA

There are some down sides to an IVA and it is always important to weigh up the pros and cons before deciding on what you would like to do. For most people struggling with debt the benefits of an IVA greatly outweigh the downsides.
Not Everyone Qualifies
Sadly not everyone can do an IVA. IVAs need to be agreed by the creditors and this means there are some criteria that needs to be met before they will accept it. The good news is that for most people we can find out if you qualify pretty quickly.
A Negative Impact on Credit Ratings
An IVA is not good for your credit rating. Whilst you are on an IVA you are unable to get more than £500 credit. Once the IVA finishes it will stay on your credit rating for 1 year. For most people considering an IVA they probably don't want or can't get more credit and their credit rating may have already been negatively impacted.
Not all Debts are Included
There are certain debts that are not included in an IVA. Some examples of this may be student loans, secured lending such as mortgages or guarantor loans and court ordered fines. You will know which debts can and can't be included before you decide if you wish to take out an IVA.
Must Keep Up With Repayments.
Your IVA payments are designed to fit into your household budget so they should always be affordable. However, if you consistently miss payments to the IVA then it could fail and you are back to square one. The good news is that your IVA supplier will make sure that everything is done to avoid it failing.
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