If you are committed to taking control of your personal debts, keeping your home and avoiding bankruptcy then an IVA, could be the best solution to your debt problems.
An IVA is a simple, flexible and effective way of getting rid of all your debts. You can expect to write off up to 75% of your unsecured personal debts with an IVA. The amount of debt that you can write off with your IVA will depend on what you can afford to pay.
An IVA is a legally binding agreement between you and your creditors. The agreement states that you will make fixed monthly payments each month into your IVA, and in return they will accept lower payments over a fixed term, usually 5 years, and write off any debt that has not been repaid in this time.
Whether you qualify for an IVA depends on how much you owe, what assets you have, what you can afford to pay into the IVA and the stability of your income to enable you to maintain payments.
This means the inability to repay debts as they fall due, and these debts total more than the applicant’s available assets. An IVA is not possible should personal wealth such as property or other assets be worth significantly more than the debts.
Applicants must be resident in England, Wales or Northern Ireland.
Applicants need to owe more than £10,000 to creditors (minimum three lines of credit from two or more creditors) and be able to afford at least £100 per month towards their debts in order to potentially qualify for an IVA.
An IVA proposal is a legal document so the applicant must provide suitable evidence to support the proposal such as payslips and bank statements.
- Consolidate all unsecured debts into in single monthly payment
- Once IVA is complete you will be Debt Free (usually 5 year term)
- Pay only what you can afford
- Interest and charges are frozen
- It is a legally binding contract which creditors cannot break if payments are maintained
- Creditor demand letters and phone calls will stop
- Bailiffs and debt collection companies will stop legal action
Potential drawbacks of an individual voluntary arrangement (IVA)
- Legally binding agreement usually for 5 years.
- Your details will be recorded on the insolvency register.
- Further credit will be restricted within the term
- Failure to comply with the IVA may lead to bankruptcy.
- Your credit rating will be affected for six years.
- Secured debts including charging order will remain outstanding.
We do not charge for providing information, fees are only payable if you take up one of the debt solution. See Key Information and Fees
To find out more about managing your debt and receiving free debt advice visit Money Advice Service or you can get more information about how to deal with creditors if you are struggling with debt by reading Insolvency Service Guide