Individual Voluntary Arrangement (IVA)
An IVA is a legally binding solution that allows you to combine all of your unsecured debt into one affordable monthly payment.
Any debt left over after the term of the IVA gets legally written off and removed from your credit file.
What is an IVA?
Set up and managed by an Insolvency Practitioner (IP), an IVA is a form of insolvency which allows you to write off your unaffordable debt, and offers an alternative to bankruptcy.
In an IVA, a single monthly payment is agreed with your current financial situation taken into consideration – this payment is then divided among the people you owe money to.
Will an IVA work for me?
An IVA can be a positive way to manage your debts.
If you do qualify for an IVA you can stop pressure from the people you owe money to, reduce monthly payments, and write off a significant proportion of your unsecured debt.
What debts can be included in an IVA?
Most unsecured debts, meaning debts that are not tied to an asset such as your home, can be included in an IVA.
- Credit cards
- Loans
- Council Tax
- Utility Bills
- CCJ
- and many more...
What debts can’t be included in an IVA?
Debts that can’t be included in an IVA are:
- Mortgage
- Car Finance (if you still have the car)
- Criminal Fines
- Child Support
Ready to get help?
It’s important to understand that no single debt solution fits everyone’s needs. That’s why we recommend speaking with one of our trusted partners to discuss your options and determine the next steps that are right for you.
IVA Pros
- Your monthly IVA repayments will depend on your personal income and expenditure, meaning it will be an amount you can afford each month.
- Your payments will be made over 5 or 6 years and once you’ve made your final payment, the remaining unsecured debt will be written off.
- The contractual interest and charges on your unsecured debt will be frozen and your creditors will no longer be able to contact you.
- If you're a homeowner, you should be able to keep your home as long as you keep up with your mortgage repayments.
- There are no set up fees to be paid before your IVA is agreed.
- If you have a lump sum to offer, you can use this as a 'full and final' settlement or a combination of a lump sum payment as well as monthly payments.
IVA Cons
- Creditors don’t have to agree to an IVA, therefore we can’t guarantee your IVA will be accepted.
- An IVA will remain on your credit file for 6 years from the date your creditors agree to it or until your IVA is complete if it lasts longer than 6 years.
- Your IVA will be listed on the Individual Insolvency Service register.
- In some cases, if you own your home, you may be expected to re-mortgage to free up some equity for your unsecured creditors.
- You will pay fees to the IVA company but they will be included as a part of the one affordable monthly payment.
- If your IVA fails, creditors may request the supervisor of your IVA petitions for your bankruptcy.
- Any debts not included in your IVA will not be written off at the end of your arrangement and you will still need to pay these.