Individual Voluntary Arrangement
Advice Debt specialise in administering Individual Voluntary Arrangements or IVAs as they’re commonly known and could help you to:
- Pay what is affordable
- Freeze interest and charges
- Stop creditor contact
What is an IVA?
An IVA is a legally binding agreement between you and your creditors, it allows you to repay your debts over a set timeframe – typically 5 years, this can be extended to 6 years if you’re a homeowner. Providing you keep to the terms of the arrangement any outstanding debts at the end of arrangement will be written off. For an IVA to be accepted you need 75% of creditors by value to agree to the arrangement.
What debts can and can’t be included in an IVA?
Examples you can include in an IVA:
- Credit / Store Cards
- Council / Utility Bills
- Unsecured Loans
- HMRC Debt
- Vehicle and Property Shortfalls
- Overdrafts
- Payday Loans
Examples you can’t include in an IVA:
- Secured Debts & Loans
- Mortgage or Rent Arrears
- CSA arrears
- Social Fund Loans
- Court Fines
- Fraudulent Debt
If you are unsure whether a debt can be included, please call our helpline on 0333 339 7212, and a member of our team will be happy to assist you.
What are the advantages of an IVA?
- Any assets you own are protected and not at risk of being sold
- You make one affordable monthly payment, making your finances much easier to manage.
- Once approved, you are legally protected meaning your creditors can no longer pursue the debts.
- Interest and Charges are frozen once the arrangement is in place.
- You make one affordable monthly payment
What are the disadvantages of an IVA?
- There are fees payable for the work involved in setting up and managing your IVA, however, these are included within your monthly payments.
- Your credit rating will be affected for 6 years.
- Your details are recorded on the insolvency register, which is a public record.
- Homeowner Only: You may be required to release equity from your home in order to repay your debts. If this is not possible the IVA may be extended for a further 12 months.
- If you’re IVA were to fail, you could be made Bankrupt.
Will creditors accept the IVA?
Creditors will usually accept an IVA if they feel it is the best solution for them. This could be because it offers them a better return on their money than other options, such as bankruptcy.
One of the advantages of an IVA is that it allows creditors to recover some of the money they are owed. If you go bankrupt, for example, creditors may only receive a fraction of what they are owed.
An IVA also allows creditors to continue to receive payments over a fixed period of time, which can be more beneficial for them than getting nothing at all if you file for bankruptcy.
Why choose Advice Debt?
We can help you.
We all know how difficult it can be when facing financial difficulties. That’s why we are here for you. Our advisers will listen to your concerns and can provide information on the debt solutions available. We specialise in individual voluntary arrangements and you can find more about them on our website.
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*To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.
