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IVA Advice for Debts of £8000+

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Pros and cons of IVA


IVA: Write off the debt you can't afford to pay

  • Fixed period to repay your debts usually 60 months
  • Interest & charges frozen once agreed.
  • Maintain a reasonable standard of living whilst repaying your debts
  • Prevent or stop legal action including bankruptcy
  • Your credit rating will be affected for a minimum 6 years which may affect your ability to obtain credit in the future
  • You will not be permitted to take out any further unsecured credit
  • Homeowners may be required to release equity from their property
  • Failing to make the agreed payments could result in the failure of the IVA

About Individual Voluntary Agreements (IVAs)

What is an IVA?

Individual Voluntary Arrangements are a form of debt management in which a formal agreement is setup with your creditors. IVA's are approved by courts in the UK and once agreed offer protection for both creditors and customers. Once agreed and when all the terms of the agreement are accepted your creditors cannot change their minds.

How will an IVA affect you?

In an IVA your creditors accept what you can afford to pay over a period of 5 years. When the 5 year period is over your outstanding debts are written off, the debt written off typically can be up to 75% of your initial outstanding debts.

An IVA can affect the chances of obtaining credit for Loans, Credit Cards, Mortgages and other unsecured debts in the future. An IVA will appear on your credit file for 6 years after completion. However, it will also stand in your favour by completing an IVA as it will show that you have managed your debts.

Will an IVA cause me to lose my home?

You will not lose your home when entering or exiting an IVA. If you have equity in your property however this may be taken into account and some form of equity release may be requested by your creditors. This would typically happen in the fourth year of an IVA and depending on your circumstances you may be required to release some of the available equity through re-mortgaging to help pay some or all of your outstanding debt. If you are unable to release equity from your property you may be required to make payments into the IVA for an additional year to make the term 6 years.

Who can setup an IVA?

Only a licensed insolvency practitioner can setup and manage an IVA on behalf of the creditors.

What fees are payable if I decide to apply for an IVA and what are these for?

There are no set up fees. Our trusted business partner Money expert will work in conjunction with our Immediate Financial advisor to ensure everything goes smoothly prior to the proposal being sent by our insolvency practitioner at the IVA company.

Once your IVA has been proposed the first five payments made into the IVA itself will go towards a nominee fee. After this for the remaining term of the plan you will pay 15% of your monthly payment as supervisory fees to the Insolvency Practitioner for the day to day running of the IVA. You do not have to pay extra for the nominee or supervisory fees as these are included in your monthly payment worked out by your advisor at the beginning of the plan.

What happens during an IVA?

The Individual Voluntary Arrangement process involves contacting all your creditors and providing a profile of your financial status. When your IVA proposal is being processed you will also receive an Interim Order which can be filed with the courts to prevent any action being taken by your creditors. A creditors meeting will be arranged and as long as 75% of your creditors approve the proposed monthly repayment schedule then the IVA is agreed (this is split out depending on your debt level with each credit) . You will then pay one payment each month to your insolvency practitioner and they divide the proceeds among your creditors.

  • Interest and charges are frozen and the amount of debt may be reduced.
  • Agreed payments are made on a regular basis by the debtor for a specified term (usually five years).
  • As much as 75% of the debt can be written off at the end of the 5 year term.
  • No legal action or debt recovery action can be taken against you if you stick to the agreed terms of the IVA.
  • You won’t have to pay any further interest which can sometimes make debt all the more difficult to clear.
  • You will not be permitted to take out any further credit agreements.
  • If you are unable to make your monthly payments during an IVA the agreement will be terminated.
  • You cannot be forced into Bankruptcy.
  • Your day to day needs and requirements will be taken into account so you will not be left without means to pay for household items.

Need advice? Call free on 0800 230 0379

Number for mobile users: 01483 412 940

Get in touch now for a confidential, no obligations chat with of our advisors and let us find the debt solution that's right for you.

Money Advice Service
To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.

Is an IVA right for me?

  • Write off the debts you can't afford to pay
  • Have one affordable monthly payment
  • Reduce demands from creditors
  • Be debt free within 6 years
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