Stop all creditor contact now and write off your debt with an IVA, from £70 per month
An Individual Voluntary Arrangement (IVA) is a UK debt solution for those struggling to repay their unsecured debts.
An IVA is a formal agreement between you and the people that you owe money to (your creditors). This agreement allows you to pay back a small percentage of the total debt you owe, through regular monthly payments. We calculate repayments based on what you can afford, given your employment status and living costs, rather than the original terms of your agreements with creditors.
Thousands of people use IVAs to consolidate a range of debts such as store cards, overdrafts, national insurance arrears, credit cards, payday loans and many others.
- entering an IVA debt solution will freeze your debts, so there’s no interest rate or fees, and allow you to pay them back over a set period
- IVAs typically last for five years
- after this term, any money still owed is written off
- you can apply for an IVA if you can afford to make regular payments towards your debts (even if this is not the full amount your creditors want)
- these monthly payments start from £70
- the IVA is created by an ‘Insolvency Practitioner’ (IP), who works with you to create a proposal
- to have the proposal approved, creditors representing a minimum of 75% (in value) must vote to agree to it
- once agreed, neither you nor your creditors can back out
Become Debt Free and Regain Control
Typically, the fixed period for an IVA is five years (60 months). Once complete, your remaining debt will disappear, and you’ll be debt-free. The percentage of your debt lump sum that the creditors write off will depend on the monthly payments you agree to, but it’s likely to be significant.
No Contact From Creditors, No Stigma
When you formalise your IVA (and sometimes sooner), your creditors will no longer be allowed to contact you – it’s part of the legally binding agreement. No more text messages, emails, letters, phone calls, or home visits!
An IVA isn’t publicly announced like bankruptcy, and it’s your decision whether to tell family and friends.
One Low Payment
You make one affordable monthly payment to your assigned Insolvency Practitioner (IP). The exact amount will depend on your circumstances but can start from as low as £70 per month.
Protect your Property and Pension
If you enter an IVA, you won’t need to sell your home or any of its contents. However, if you have a lot of equity in your house, you could be asked to remortgage it, to release money towards the end of your plan.
Your private pension receives protection through an IVA, and once you’re debt-free, you can continue building it.
Stops Interest and Charges
Once you enter an IVA, all debt-interest will stop. That means no more late payment, overdrawn, or overspending charges. It’ll all be frozen, allowing you the breathing space to work towards reducing your level of debt.
Potential For Payment Holidays
If something unexpected happens in your life, your IP may agree for you to take a temporary payment break. In this case, the months you missed will be added onto the end of the IVA, extending the term.
Your advisor will help you work out allowances for your food, entertainment, utilities, child support, and all other factors, allowing you to create a budget that is considerate of all your essential costs. They will also consider any lump sums you can contribute.
You submit your documents digitally, meaning you can be up and running in a short period. Plus, with an IVA, there are zero upfront costs – your only commitment is the low monthly payment.
No Career Impact
How does an IVA affect your job and employment contract? In most cases, employers will not even ask about insolvency, and it’ll have no impact. There are a few exceptions, for example, if you are an accountant or employed in banking, insurance, and law – so it’s worthwhile to check. If you are self-employed, you can continue trading.
Allows a Fresh Start
By the end of the term, you’re set-up for a fresh start! An IVA can give you a second chance to manage your finances and rebuild your credit rating.
Can anyone get an IVA?
InsolventYou aren’t able to pay the money you owe on time (to a person or business), and the value of these debts is greater than the value of your assets.
Over £5,000 Unsecured Debt£5,000 of unsecured debt is our guideline because this is a standard figure that the best IVA companies will use; some work with a minimum of £10,000 only. If your unsecured debt level is below £5,000, then we’ll make a case-by-case decision on your circumstances.
2+ CreditorsYou’ll need to owe money to at least two different people, businesses, or companies (creditors).
Pay a Minimum of £70pm
Better Return for Your CreditorsYour creditors need to be sure that the deal you offer them is better than the result if they made you bankrupt. Your IP will structure your IVA proposal in a way that makes it more attractive than bankruptcy, so they tend to accept the majority of submissions.
Reside in England, Wales or Northern IrelandYour current living address needs to be registered in England, Wales or Northern Ireland to be eligible. If you’re a resident of Scotland, you can read our post on Scottish Trust Deeds.
How to Apply for an IVA
Step 1: Use Our IVA CalculatorQuickly check your eligibility by using our IVA Calculator. The form enables you to get free support and takes very little time.
Step 2: Credit CheckThis credit check will not affect your score, and it isn’t an application. But it will display a list of your debts that we’ll need for the IVA proposal. We’ll need to manually add debts that are not showing on the credit check, which leads to step three.
Step 3: Gather Your Financial InfoGather as much detailed information as you can regarding your regular expenses (rent, travel, utility bills, etc.). You and your Insolvency Practitioner will use this information to calculate an affordable amount you can repay for the term of the IVA.
Step 4: Building an IVA ProposalYour Insolvency Practitioner will create an IVA proposal to present to your creditors and the court. It will incorporate a detailed financial breakdown of your current circumstances and proposed repayment terms. It will make a case for why the creditors should accept the IVA.
Step 5: Your Creditors Will Consider the ProposalOnce your Insolvency Practitioner finalises the proposal the next step is to call a creditors’ meeting. Your Insolvency Practitioner will present your proposal to the creditors that your debts are with, and each creditor will receive a vote. The power of that vote depends on the percentage of the debt they have, within your total debt. To have an IVA agreed, you need 75% approval. If only half agree, it’s not enough.
Step 6: Approval!You’ll formally enter into the IVA and become protected against debt recovery action. When you abide by the terms of the proposal, your remaining debt will receive a write-off at the end of the term.
Step 7: Annual Review of Your IVA DebtYour IP will conduct a review each year to ensure you’re still able to make the payments. You can expect more financial checks, but as long as you’re able to make the agreed payments on time, nothing will change.
Step 8: Become Debt FreeCongratulations! At the end of your IVA, you will be debt-free!
Get IVA Advice Today
At IVA Advice, we work on your behalf with a network of the country’s top-rated Insolvency Practitioners, who are members of the Insolvency Practitioners Association. They will use their experience on the topic to guide you through the IVA process in detail, and make sure that you understand your rights.
We can provide tailored debt solutions for your specific circumstances and, if appropriate, connect you to the best IVA company for your situation. This advice is FREE, and you can get started immediately with our IVA Calculator.
Frequently Asked Questions About IVAs
How does an IVA affect your life?An IVA can reduce a lot of the stress related to debts, fines and the debt collection process. If you have an IVA, you receive protection from further action from your creditor.
Is an IVA a good idea?First ask yourself ‘what is an IVA?’ and make sure you understand the key features of individual voluntary arrangements (I V A s). Whether an IVA is a good option depends on your circumstances and the level of debt you have. For example, if you are due to receive an inheritance during the IVA period, that could be a good reason to look at other options. You must tell your IP about personal circumstances changes. You’re allowed to make savings as long as these come out of your agreed budget. An IVA is also not a solution for the following types of debt:
- Mortgages, because these debts are secured on an asset, so creditors are unlikely to agree
- Child support arrears
- Student loans