What is an Individual Voluntary Arrangement (IVA)?
An IVA works under government legislation and is formal agreement with your creditors to clear all your unsecured debts within a 60 month maximum, these agreements are suited to anyone owing £12000.00+ to 3 or more creditors.
An IVA is only available in England, Wales and Northern Ireland and is supervised by an insolvency practitioner, so if you live in Scotland please go to our Trust Deeds page.
How does an IVA work?
An Individual Voluntary Arrangement is one of the most discreet Debt Solutions
available and is often used by people in a professional career or in public service as a way of clearing any unsecured debts without affecting their career prospects. Whilst the IVA is discreet it will still appear on your credit file and as a result you will struggle if you apply to further credit once it is in place.
An IVA is designed to reduce your overall debts, prevent Bankruptcy
or court proceedings, stop all interest and charges and get you debt free within a maximum 60 months. All IVA proposals are supervised by an insolvency practitioner who will oversee the administration of the agreement throughout and deals directly with all of your unsecured creditors on your behalf.
One of the most positive and important aspects of an IVA is that it is a fixed plan and once it has been agreed by your unsecured creditors you will only pay one affordable monthly repayment towards the IVA. This means that once the IVA is agreed and assuming you keep up your agreed repayments; your creditors cannot cancel the agreement, or apply for your Bankruptcy
The Individual Voluntary Arrangement also protects you from other formal court action and this is guaranteed by your unsecured creditors throughout the agreement. Once your final repayment is made towards your IVA, any outstanding debts are legally written off by your creditors as part of the agreement and you become debt free.
Whilst an IVA is still possible even if you have been refused a Debt Consolidation
, Secured Loan or Remortgage, when your Individual Voluntary Arrangement is completed and you have made your last repayment you may not be able to make further credit applications in the short term. It is therefore important to make sure you understand that it takes some time for your credit rating to repair after an IVA is completed.
Is an IVA right for me?
Please remember an IVA should only be considered in circumstances where Debt Problems
are severe. It is a supervised agreement and your credit rating will be affected. The list below highlights some of the risks of an IVA;
- Failure to stick to the IVA agreement can result in your bankruptcy.
- The agreement is subject to terms, your circumstance and the creditor’s majority acceptance.
- During your IVA proposal, it can be requested that you release available equity from your home to increase the overall IVA settlement offer to your creditors.
- An IVA is not available to residents of Scotland due to differences in the law. In Scotland Trust Deeds are used in much the same way instead.
To get even more helpful Debt Advice
about Individual Voluntary Arrangements or any of the other Debt Solutions
we are able to offer please don’t hesitate to call one of our trained debt planners for more information. Call us directly on 0161 8500138
or Apply Online
Please remember repaying debts over a longer period can increase the total amount repaid and may affect your ability to obtain further credit in the future. Fees will be payable for all services provided in relation to all the debt solution detailed on this site.
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