Our calculator will help you to decide whether an IVA is right for you.
Individual Voluntary Arrangement (IVA)
If you want to take control of all personal debts, avoid bankruptcy and you live in England, Wales or Northern Ireland, an Individual Voluntary Arrangement, or IVA, could be the best solution for you. An Debtors IVA is an effective and simple way to solve your debt problems and save you from bankruptcy.
An IVA is arranged through a licensed insolvency practitioner and forms a legally binding arrangement between you and your creditors. Depending on your circumstances and affordability, an IVA can help to write off between 25% and 75% of your unsecured personal debts.
Terms and conditions
After an IVA is accepted by your creditors, you would be required to pay a fixed amount every month, for a fixed period of time, usually five years. If your circumstances improve during the IVA, your payments may be reviewed to ensure your creditors get the best return possible. You will, however, never have to pay back more than you actually owe. After the IVA is completed, any outstanding unsecured debt is written off. Additionally, If you own your own home, you will usually be expected to release any equity in the property and pay a percentage of this into the IVA. You will not be expected to sell your home in order to repay your debts.
During the course of your Debtors IVA, your creditors are not permitted to contact you directly. All contact must be made through the insolvency practitioner handling your case. This is often a relief for somebody used to receiving threatening calls or letters.
In an IVA you are only expected to pay what you can reasonably afford. An Income and Expenditure comparison will be made to ensure that you have sufficient money to pay secured loan commitments, mortgages and day-to-day living expenses. Any disposable income will then be entered into the IVA.
Comparison between IVA and bankruptcy
If you are thinking of filing for bankruptcy, you stand the risk of losing your home and jeopardising your career options. During the course of your bankruptcy you will not be able to obtain any credit and will attract negative publicity. Additionally, after you are discharged from bankruptcy, you may still have difficulty obtaining credit for a number of years. With an IVA, you are not usually excluded from any career path, can continue trading if you own your own business, and your IVA is not published in the press. The most important benefit of IVA is that you get control over your debts and your life.
If you are thinking of filing for bankruptcy, then think twice. An IVA can provide you with better opportunities and better future security.