Individual Voluntary Arrangements – IVA
A debt solution offering affordable payments and potentially debt forgiveness
What is an IVA?
A IVA is a solution for unaffordable unsecured debts. It is intended for people with little prospect of fully repaying their debts – but able to make some level of regular repayments.
The idea is – you pay what you can reasonably afford over normally 60 months – and in return, any remaining debt is written off.
An IVA is formal debt solution – meaning it is based upon insolvency law and legally binding once in place.
IVAs are becoming increasingly commanplace. In 2018 over 70,000 people entered in to an IVA*
How an IVA works
An assessment of your income, outgoings, assets, and debts is made based upon standard expenditure guidelines. This will tell us if an IVA is a good option for you.
Should an IVA be suitable – the next step is to draw up a formal proposal for consideration by the companies and organisations you owe – who are your creditors.
If 75% of the creditors (by the value of debt) vote in favour, the IVA is accepted. All creditors are bound by its terms, including any creditors who did not vote or voted against. All debts are frozen so no more interest or changes can be added.
Being In An IVA
Creditors must not chase you for payments for any of the included debts. So, no more letters, phone calls nor threats of legal action.
Provided you maintain payments – unpaid debt is written off at the end of the IVA, which typically lasts 60 months.
Your expenditure is expected to keep within reasonable guidelines – but you won’t be asked to live in poverty.
You situation is reviewed once per year to make sure the payment levels remain fair for both you and those you owe.
IVAs are not available in Scotland. If you live in Scotland A Trust Deed is a close equivilent.
“An IVA was the best solution for our family.”
“Guardian listened and were non-judgemental.”
Once your IVA has been accepted, you could benefit from:
Repayments to creditors are based on what you can afford – not how much you owe.
Once you have made the agreed contributions any remaining money owed is written off.
A sense of control
An IVA allows you to regain control of your debts and work towards debt freedom
Debts cannot increase further
Frozen interest and charges so that your debts do not increase.
Creditors they cannot pursue you for their debt or take legal action.
Knowing when you’ll be debt free
A fixed agreement usually lasting 5 years, after which any remaining unsecured debts will be written off.
Home is protected
An IVA can help safeguard your property and ensure future affordability even after the IVA.
You’ll be less stressed knowing IVA will stop contact from your creditors and your payment are affordable
Avoidance of bankruptcy
An IVA Enables you to continue to trade if you are self-employed or have a trading business.
Better able to afford other financial commitments
An IVA can catch unknown debts such as unpaid tax or overpaid tax credits.