What is an IVA?
An IVA stands for Individual Voluntary Arrangement and is a formal arrangement between an individual and their creditors. Over 3500 people enter into an IVA every month.
If you are currently struggling to make your monthly payments on unsecured debts then an IVA may be able to help you. An IVA is a way of consolidating all of your debt into one affordable payment. Your payment is calculated by deducting any reasonable living costs and necessary bills from your monthly income.
The amount you are left with is the amount you would pay monthly for the IVA and this would replace the payments of any debts included in the IVA. After making the agreed IVA payments (usually after 5 years) any debt that still remains gets legally written off.
They are designed to help both parties by giving the consumer an affordable monthly payment and their creditors more chance of getting their money back. It is a form of insolvency but is less severe and of more benefit to consumer and creditor than bankruptcy.
Do I qualify for an IVA?
If you live in England or Wales and owe over £12,000 to two or more creditors and are struggling with your debt repayments then you may qualify for an IVA. If you live in Scotland you would need to consider a Trust Deed.
Do I need to pay back everything I owe?
In short, NO. With an IVA you only pay back what you can afford not what your creditors ask you to repay. You make your monthly payment for a fixed term which is usually 5 years. Anything you haven’t paid off after 5 years will be legally written off by your creditors. On average our customers get between 60 – 70% of their debt written off.