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IVA - Individual Voluntary Arrangement

Find out how an IVA can help you consolidate and reduce your debt repayments – you may be able to get up to 80% of your debt written off.*

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*On average customers may have between 25% to 80% of debt written off with an Individual Voluntary Arrangement (IVA).

Customers can get free debt counselling, debt adjusting and providing of credit information services from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from the Money Advice Service click here
You can find. Government guidance on dealing with your creditors here.

Start planning a debt free future today!

Individual Voluntary Agreement (IVA)

Individual Voluntary Arrangements (IVA’s) were introduced by the Government in the 1986 Insolvency Act as an alternative to bankruptcy. They were put in place to help anyone in serious debt finding it difficult to make their monthly payments. If you live in Scotland the equivalent solution is a Trust Deed.

An IVA is a formal agreement with your creditors (the people you owe money to) where you agree to pay only what you can realistically afford, taking into account your living expenses and monthly income. This is paid as a single monthly payment, usually over a period of 60 months. At the end of the period any remaining debt is written off and you owe nothing to your creditors.

On average, clients have had 25% to 80% of their debt written off with an IVA.

Provided you maintain your repayments as agreed, an IVA protects you from further legal action from your creditors. In addition to this, all interest and charges are frozen at the time the IVA is agreed.

It is very important that you understand your legal rights and responsibilities if you are in debt. Expert debt advice can make an enormous difference to the outcome of any debt problems you are currently facing.

Debts which can not be included in an IVA:

  • Magistrates court fines
  • Child support and maintenance
  • Student loans
  • Social fund loans
  • Compensation for death and injury.
  • Confiscation orders

Please be aware that lenders are not obliged to accept less than contractual, payments or to freeze interest and charges. This may result in an increase in the total, amount repayable and may affect your credit rating.

Pros & Cons of an IVA

Advantages of an IVA

  • Available to everyone – Individuals, couples and businesses.
  • Remaining debt legally written off.
  • Interest and charges frozen.
  • Keep your house and other assets, such as your car.
Debts, which can be considered in an IVA
  • Personal loans
  • Store cards
  • Payday Loans
  • Catalogues
  • Debt collectors
  • Bailiffs
  • Old car finance
  • Previous years council tax (subject to area)
  • Old utility bills
  • Old phone bills
  • HMRC Debt

Disadvantages of an IVA

  • Any debts not bound by your IVA will remain outstanding.
  • Your credit file will be affected for a period of 6 years, starting when the IVA is
    approved your ability to obtain credit will be limited
  • An IVA can impact on certain jobs such as those in finance and the Civil Service, if
    you are unsure check your employment contract
  • There are costs associated with an IVA, a Nominee fee, Supervisors fee and out of pocket costs such as insurance and postage. The costs are deducted from the payments you make.
  • You may be asked to re-mortgage 54 months into the IVA; if this is not possible you
    may be required to extend your IVA by a further 12 months
  • Failure to keep up with IVA payments may result in your creditors filing for your Bankruptcy
  • There are restrictions on certain items of expenditure for a person in an IVA.
  • Entering into an IVA, debt relief order or a protected trust deed means that your details will be entered onto a public register
Debts you can’t include in an IVA
  • Child Maintenance
  • Child support deficit
  • Student loans
  • Magistrates’ court fines
  • Secured loans
  • Current car/bike finance
  • Mortgage arrears
  • Guarantor Loans

Criteria to qualify for an IVA

  • Owe more than £5000
  • Can afford a minimum of £80 per month
  • Owe money to two or more creditors
  • Are financially struggling to meet repayments or in arrears

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