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IVAs | Debt Advice | IVA

What is an IVA? A good solution for debts over £15,000

An IVA, also known as an Individual Voluntary Arrangement, is a formal Debt Solution introduced in 1986, which allows you to avoid bankruptcy by paying off a portion of the debts that you owe and writing off the debts you cannot afford on completion. Due to an IVA being a formal agreement your creditors will be bound by it's terms.

Find out if you qualify to get your debts written off




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IVA Advantages

  • Complete debt freedom in 5 yrs, or quicker if it is a lump sum IVA.
  • The debts you cannot afford to pay are written off
  • Interest and debts are frozen.
  • Creditor harassment will cease. They are prohibited from demanding any further payment.
  • It is a legal agreement. Your creditors can't back out once it is in place.
  • You have a manageable reduced monthly payment.
  • At Debt Advice, we can put you in touch with companies that don't charge upfront fees.
  • Open to tenants and homeowners

Is an IVA the right choice for you?

An IVA is the right choice for you if

  • You have debts over £15,000
  • You have a surplus income each month (approximately £200+ after all your essential living expenses) , excluding any creditor payments (your new payment will include all your unsecured creditors)
  • You have 2 or more creditors (people you owe money to).

How does an IVA work?

When you first contact someone about an IVA, the first thing they will do is run through your circumstances to see if you qualify for an IVA. This will be general stuff like, are you a homeowner/renter?, are you single/couple/family?, are you employed/unemployed? etc... They will go through your monthly income and expenditure using a set of guidelines (aside from your debts) to determine exactly how much money you are left over with at the end of each month to pay your debts.

If you still look like an eligible candidate for an IVA after this and you have enough of a disposable income to put towards an IVA, our Insolvency Practitioner (IP) will put forward your proposal to negotiate with your creditors. If the IP thinks it looks like a successful IVA, then chances are your IVA will be accepted.
**Be warned. Do not pay any upfront fees for this service up to this point. Your IVA could fail and you will lose your upfront fee. There are companies that do not charge upfront fees. Contact us at Debt Advice to find out more.

If more than 75% of your crediors vote in favour of the IVA, then your IVA is approved and your reduced monthly payments towards a percentage of the total debts that you owe will begin.

How long does an IVA last for?

An IVA usually lasts for 60 months or 5 years. After this time, your IVA is complete and the remainder of your debt is written off.

For example, if you have debts of £20,000 and have a can afford £200 every month. You enter an IVA and after 5 years you have paid £12,000 (60 months x £200) and the remaining £8,000 is written off. Your creditors can no longer pursue you for this debt.

Not all IVAs can last this long. Some IVAs can be settled in one lump sum payment. i.e. if you have equity on your home. This is known as a Lump Sum IVA.

For more information on IVAs contact our Debt Advisors on Debt Advice. You can call our lo-call Debt Helpline on 0800 043 5133 or fill in the form above.

More Debt Solutions

If an IVA sounds like something you might be interested in, you can discuss it with us at Debt Advice further, in confidence and for free.
If you feel you need more information on other Debt Solutions please see the links below or contact Debt Advice on our lo-call helpline 0800 043 5133.