Independent Voluntary Agreement (IVA) Advice - Is it your best option?
To help you clear your debts, an IVA is a deal which is agreed between you and your creditors to pay monthly payments, usually over 5 years or less.
If you own a property, you will normally be expected to offer creditors a sum of money in place of a proportion, usually 50%, of your equity. You may also offer your creditors a lump sum to settle your debts through an IVA.
Complete our enquiry form, an advisor will call you back and will give you help and advice, their main aim is to find the best solutions for your own personal debt problems.
Most creditors will agree to an IVA if you show a genuine pledge to pay off as much of your debt as you can afford. Instances where they could reject your offer could include if the purposes dividend is too low (e.g. less than 25p in the pound), if bankruptcy offers a better payout to the credit company, or if they feel you have taken on the credit irresponsibly (e.g. through gambling).
It's also worth noting that if you cannot meet your short-term payments you may be able to negotiate a short payment holiday.
Advantages of an IVA:
- It covers all debts.
- Your home is protected.
- When an IVA is approved, creditors cannot take any further action against you (e.g. petitioning for bankruptcy or charging orders against your property).
- Unlike Debt Management, no matter whether your debts relate to amounts due on loans, credit cards, trading debts such as Self Assessment Tax, VAT or amounts due to suppliers as well as council tax and utilities, all creditors are bound by the IVA.
- You can write off debt legally.
- All charges and interest are frozen from the date of approval of the arrangement.
It is a private arrangement: unlike bankruptcy your IVA is not advertised. Your employer will not know unless you choose to tell them.
Disadvantages of an IVA:
- Failure of the arrangement could mean that the Supervisor has to petition for your bankruptcy.
- Your IVA is registered which may be picked up by credit reference agencies who will note your IVA on your credit reference file.
