Want to consolidated all your debts in to one affordable payment, with protection from your creditors & have debts written off? An IVA could be the answer!
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Individual Voluntary Arrangement

Debtadviceline provides various options to help you deal with debt problems. These include bankruptcy, debt management plans, Scottish trust deed and Individual Voluntary Arrangements (IVAs). We don't judge people, we just provide the support, guidance and solutions that are needed to deal with debt.

What is an IVA 

What is an IVA and who can apply for one

How an IVA works

A breakdown of an IVA and the process

Debts you can include

Unsecured debts you can add to an IVA

Pro's and Cons of an IVA

Know how an IVA can benefit you and things to consider

What is an IVA & who can apply

"Every organisation, whether they're a charity or a commercial business has to adhere to the same legislation and rules when drafting an IVA proposal."

An Individual Voluntary Arrangement (IVA) was first introduced by the government in 1986 to help people struggling to pay back their unsecured debt. It is a legal agreement between you and your creditors to pay back what you can afford, with the remaining debt written off at the end of the agreement and normally only lasts for 60 months

Normally an applicant or joint applicants should owe at least £6000 of unsecured debt between two or more creditors to apply for an IVA.
Currently in the UK you cannot setup or do an IVA without the assistance of a licensed Insolvency Practitioner (IP)

You will be surprised at the number of people who are doing an IVA, in fact the number of people taking out an IVA has been growing year on year over the last few years. Some of the main reasons for the growing numbers, is an IVA actually gives what people are looking for; Protection against creditors, becoming debt free in a set time, having their debt legally written off... but most importantly having a affordable monthly payment without creditor hassle.

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KEY FEATURES ____________________
Affordable monthly payment, Debts written off, Debt free in a set time

The process & How an IVA could work for you

When your IVA has been approved, all interest is immediately frozen, all charges and late payment fees are stopped and creditors can no longer contact you regarding your debts. You are now legally protected by the IVA and your creditors forfeit any right to take legal action against you, ensuring your home and any other assets are safe.

STEP ONE
Together, we will establish whether an IVA is your best option. We will do this by taking the time to fully understand your Situation. We will discuss all the options you have available to you, to determine whether an IVA is is the best option.

STEP TWO
If you wish to apply for an IVA we will start the IVA process by  collecting the relevant information related to your case & the IP (Insolvency Practitioner) will prepare your proposal.

STEP THREE
Your creditors meeting will be arranged, during which your creditors will cast their vote as to whether they agree to accept your IVA proposal. Once the required majority agree to accept your IVA proposal, the IVA is considered approved.

Once you have successfully completed your IVA, all outstanding balances left unpaid by your IVA payments will be legally written-off leaving you debt free.

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KEY FEATURES ____________________
No upfront, setup or hidden fees
Total unsecured debt £14,300 between 6 creditors
Debt repayments totalling £476 per month
Qualified for an IVA & the new repayment is only £90 per month
The total debt paid back over the 60 months is only £5,400
With the IVA over 60% debt written off & monthly payment reduced by over 70%
IVA example. Your IVA will vary based on your circumstances
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Some of the major creditors an IVA can deal with

Unsecured debts you could add

  • Overdrafts, credit cards, store cards, charge cards, catalogues, pay day loans, unsecured loans, doorstep loans, credit unions
  • Unsecured debts that have a CCJ or attachment of earnings in place. 
  • Arrears from utility supplies from previous properties, previous suppliers e.g. gas, electricity, water Council Tax (previous years and current year if in arrears)
  • Debts that were previously secured against an asset that has been repossessed – shortfalls on vehicle HP and properties. 
  • HM Revenue and Customs VAT, PAYE, Self assessed tax, National Insurance.
  • Arrears from service providers from previous properties, previous suppliers e.g. digital TV, mobile phones, landline
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KEY FEATURES ____________________
Can help with most, if not all unsecured lenders

The benefits of an IVA & things to consider

Telephone Calls and Payment Demands Stopped

Once the IVA is agreed, your creditors by law are no longer allowed to demand payments from you either by telephone or letter.
Interest and Late Payment Charges Frozen

After the IVA has been put in place, your creditors cannot add further charges or interest to any of your accounts covered by the agreement by law.
Single Monthly Payment

At the beginning of the arrangement, you agree with your creditors what you can afford to pay each month. In some cases, you can pay a one-off lump sum.
Protection for your home

Homeowners would not be forced to sell their home during an IVA process, but may have to release some money through a remortgage towards the end of the IVA, if that is possible.
Protection for certain assets

It is possible to keep certain assets in an IVA such as a car that is needed for commuting to work. It is also possible to negotiate with creditors to keep other assets if extra IVA payments are made, but it would be up to creditors to agree to this.
Repaired Credit Rating

Once you have successfully completed your arrangement, you will be allowed to borrow money and your credit rating will start to improve. You will not be credit blacklisted for life.
Payback

Many people are keen to avoid bankruptcy and pay back us much as they can reasonably afford on what they have borrowed. In a bankruptcy creditors would in many cases see little or no payback at all, but an IVA will allow a better return for creditors and show that the debtor has paid back as much as they could.
Fixed, Legally Binding Agreement

Once agreed, the IVA is legally binding (see glossary) on all the creditors. You will know exactly where you stand and exactly how long it will be before you are debt free.
Flexible

Even though the IVA is a fixed agreement, a lot can change in 5 years. The IVA allows variations when situations change, provided these can be proved and agreed with creditors.
Protection from Court Action

Once an IVA is in place, your creditors are not allowed to take further legal action against you as long as you stick to the terms of the arrangement.
Professional Status

Some jobs do not allow the employee to become bankrupt; whereas an IVA can be acceptable. Debtors cannot be company directors whilst bankrupt, so the IVA can be preferable for them. It is important to check the terms and conditions of employment to be sure of this.
Debt Free in 5 Years

An IVA will last for a fixed period of time, normally no longer than 5 years.
Minimum Level of Debt

Usually you will only be able to undertake an IVA if your total unsecured debt is more than £6,000. In addition, you will usually need to be able to afford a monthly payment of at least £80.
Credit Rating

Your credit rating will be effected and you will be unable to borrow for the duration of the IVA. You will also have a period after your IVA where it may be hard to get credit. This period varies but a credit rating can be repaired over time.
You must include all creditors

All creditors must be included and you cannot make separate arrangements with each one (which can be done in a DMP).
No Unsecured Borrowing

During the ArrangementWhile you are in an IVA, you will not be able to use your store or credit cards. These must be cut up. However, it may be possible to change an existing mortgage or take a new one while you are in an IVA. In addition, you may be approved to borrow up to £500 if this is agreed with the insolvency practitioner. You will be able to use prepaid cards.
Possible Release of Home Equity

If you have any equity in your property or any other significant valuable assets, you may be required to release some or all of this as part of the IVA agreement. However, sometimes the creditors agree to an extra year of IVA payments if an equity release from your property is not possible, making the IVA 6 years in total instead of 5.
60 months

Failure to maintain control of your finances and keep up your IVA payments will mean that you may be bankrupted. However you may be able to take payment holidays and you may be able to miss payments for extreme circumstances, but this will extend the period of you IVA.
The Money Advice Service is an independent service set up to help people manage their money. To find out more about the different options for paying off your debt. IVAs are only available in England, Wales and Northern Ireland.

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Our debt plans can deal with most of the UK's unsecured lenders, some of the creditors are listed >

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