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What is an IVA?
With an individual voluntary arrangement (IVA), you could lower your unsecured debt repayments and fit them in around other financial commitments. Secured debts, such as your mortgage, will not be included in this and you will need to continue paying separately for this.
IVA debt management is a legally binding agreement between you and your creditors where you will arrange monthly payments to pay back your debt, or in some other cases, your IVA repayments will be in a lump sum. IVA help should also stop your creditors from charging interest on your current debts and they will stop chasing you for payment.
During your IVA debt consolidation, you must ensure you make the payments each month. If you miss an IVA payment, contact will be made by your practitioner and you will have a month to respond to a notice of breach. If you respond during that period, your consultant won’t take any action against you; however, if you don’t respond in time then your IVA will be canceled.
If your income changes at any point after you have applied for an IVA or throughout the duration of your IVA advice, you must let your consultant know. For example, if your income has increased, it is likely you will need to pay more and a new monthly repayment fee will be arranged. If you don’t tell your insolvency practitioner of a change in income, then you are breaking your IVA agreement.
In the case of redundancy, you will be able to keep 6 months of your redundancy money. The remaining money will then be put towards your individual voluntary arrangement repayment.
Key Facts of an IVA
- Lower unsecured debt repayments
- Debt consolidation into single monthly repayments
- Five to six-year duration
- Potential restrictions on expenditure
- Potentially higher interest rates
- Credit ratings affected for a minimum of six years
- Publicly available to view via the Individual Insolvency Register
How IVA Debt Consolidation Repayments Work?
Once you apply for an IVA, a member of our team at Fresh Start will be in touch with you. We will let you know whether or not you are eligible for IVA debt management. Once your application has been approved by us, we will arrange the repayment method including the creditors who will be paid.
During the early stages of your IVA help, we will establish how much you can pay per month. For some people, IVA repayments are more effective as a lump sum, or for others, with monthly payments. In some cases, it can be a combination of both. IVA debt management plans can last up to 6 years. Each payment will be given to your insolvency practitioner, who will manage the payment on your behalf and evenly distribute it to your creditors.
Who Can Apply for an IVA Help?
To be successful when you apply for an IVA, you must have £5,000 or more of unsecured debt, owing this money to two or more creditors. You must also be a resident in England, Wales or Northern Ireland and have a steady income that allows you to make regular monthly repayments of at least £100 for your IVA.
Min. £5,000 debt
If you have unsecured debts of £5,000 or more, you may be eligible for IVA help, allowing you to clear your debt at an amount you can afford.
Min. two creditors
Once you apply for an IVA and it has been approved, it will be subject to terms and conditions agreed upon between you and your creditors.
£100 per month
To be eligible for an IVA, you will need to have a steady income that allows you to make consistent monthly repayments of at least £100.
18 years old
IVA debt management is only available as an option to help you clear your debts if you’re 18 years old or above
Credit Cards
Payday Loans
Store Cards
Overdrafts
Personal Loans
Gas & Electricity Arrears
Business Debt
Debts to Family & Friends
Eligible Debts for IVA Debt Management
IVA help will work for...
IVAs are a potential option for clearing unsecured debts, such as payday loans, council tax arrears, debts to family and friends, store cards and more.
Credit Cards
Child Support Arrears
Magistrate Court fines
TV-license arrears
Social-fund loans
Rent arrears
Ineligible Debts for an IVA Debt Consolidation
IVA debt management will not work for…
IVAs are not available as an option for debts such as mortgages, rent arrears, student loans, court fines and so on.
Why choose us?
Why choose National Debts Line UK For IVA Advice?
National Debts Line has helped more than 12,000 people gain control of their finances and become debt-free. If you’re struggling with debt and finding it tough to keep up with your bills, speak to one of our friendly, professional advisors today. We are non-judgemental and will provide you with the best advice based on your circumstances. We will also advise you on other debt management options if IVA help isn’t the right solution for you.
The upsides to using an IVA?
- Typical debt written off is 75% – only debts added to the IVA
- Creditors will not contact you
- Make one affordable payment per month
- Protect your home
The downsides to using an IVA?
- Impact on credit file – 6 years from the start
- Need to meet eligibility criteria
- You will be on a public insolvency register
- If you are a homeowner, you may need to release equity from your home