"a IVA" and "IVA a" have become one of the most popular searches on this site and is an indication of how much confusion there is around IVA's or Individual Voluntary Arrangements, and whether if you're in serious debt you should or could us it to regain control of your debts.
An IVA is an official legally binding solution that makes the debt that you are currently struggling or failing to repay, manageable. But before you can get one, an Insolvency Practitioner via a IVA companies will need to take a detailed look at what you owe and how much you can afford to repay. They will then propose a new lower monthly repayment to your creditors that is set at a level that is fair and manageable. This normally involves a write off of a significant part of your debt and repaying the balance over 60 months or 5 years.
If you apply for an IVA, we strongly recommend that you use a company offering a free IVA. We have reviewed most of the IVA companies in the UK and their comparison forms part of the advice service that is accessed via our preferred charity debt advisors.
Summary
Individual Voluntary Arrangement IVA
- Introduced by the Government in 1986 as a way of helping individuals not become bankrupt
- You need to owe more than £15,000 and you or your partner be employed
- Typically you can write-off 50% - 60% of your debt and pay the balance over 5 years (60 months)
- Interest and charges stop and creditors can't change their mind
- Your home is protected but you will be required to release any equity you have
- It's a popular debt solution with nearly 40,000 IVA's started in 2008, that's one every 13 minutes
- We only recommend organisations that have a track record of getting IVA's accepted by creditors and don't charge fees
Comparison Table Of Debt Solutions
| Solutions | Debts Written Off | Legally Binding | Interests & Charges | Residential Status | ||
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Average 58%*
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Yes
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Stopped
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Tenant or Homeowner (Eng/Wales)
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Not Normally
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No
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Many Freeze
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Tenant or Homeowner
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Consolidated
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Yes
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New Rates & Charges
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Tenant or Homeowner
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Bankruptcy is a severe last resort if you are in serious debt and no other debt solution can save you from going bankrupt. Bankruptcy may protect you from your creditors and allows you to start fresh, but you need to think carefully about all the implications involved.
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*58% was the average debt write off with an IVA, April - June 2008, CCCS
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