Debts spiralling out of control?
We can help you onto the road to financial freedom!
Individual Voluntary Arrangements (IVAs)
What is an Individual Voluntary Arrangement (IVA)?
Individual Voluntary Arrangements (IVAs) were introduced by the Government in 1986.
They provide a way for people to deal with their debts with fewer potential long term consequences than bankruptcy.
An IVA is a binding legal agreement between you and the people you are struggling to repay (your creditors).
These may be credit cards, store cards or loan companies. The IVA typically lasts for a period of up to five years.
What does an IVA involve?
The arrangement involves you making one affordable monthly contribution towards your debts.
This continues for the length of the IVA, after which any outstanding debt is written off.
The amount written off depends on your individual circumstances and can be as much as 60-70% of the debt.
Additionally, interest on your debts will be frozen and creditors should not contact you asking for money.
Things you own, such as your home, can be protected under the IVA.
Advantages of an IVA
- Possibly write off as much as 60-70% of your debts
- Be clear of debts included in the arrangement after 5 years
- Fees are incorporated into the monthly contributions agreed with your creditors
Disadvantages of an IVA
- You cannot get credit for the length of the IVA
- Your credit rating will be affected for another year after the IVA is complete
- Homeowners may have to re-value their homes in the 4th year and release equity to cover debts
if the value has increased
