IVA's and the Government

"IVA Gov" is a popular search term because of online advertising suggesting IVAs are in some way backed by the government.

Let’s be clear, IVAs are not managed by the Government.  The fact is that IVAs were introduced by the Government in the 1986 Insolvency Act as an alternative to bankruptcy.  Individual Voluntary Arrangements are actually managed by licensed professionals from IVA companies called Insolvency Practitioners.

The industry is however regulated by the Insolvency Service, which is overseen by the UK Government’s Department of Business, Innovation and Skills.

The fact is, IVA's were introduced by the Government in 1986 and now form one of the 4 main debt solutions that individuals use when faced with the problem of solving serious debts and returning life back to financial normality. If you have an IVA arranged, it's not really a Government IVA as the Individual Voluntary Arrangement is managed by an IVA company not a government department.

However, make no mistake, an IVA is an official solution that involves IVA companies, and Insolvency Practitioners and once set-up is legally binding.

IVA

Who can use an IVA?

To be eligible for an IVA you normally have to have debts of over £15,000, with the actual average debt being closer to the £40,000 level. You'll also need to owe more than 3 creditors money and be in full time employment or have a partner working. We advise that you speak to one of our recommended debt advice charities to find a suitable solution for your situation. >>

Summary

What is an IVA

  • Introduced by the Government in 1986 as an alternative to bankruptcy
  • Typically, you need to owe more than £15,000 and have something to offer to your creditors each month
  • 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 may be required to release any equity you have
  • Someone enters an IVA in England and Wales every 13 minutes
  • We only recommend organisations that have a track record of getting IVA's accepted by creditors and don't charge upfront fees

Comparison Table Of Debt Solutions

Solutions
Debts Written Off
Legally Binding
Interests & Charges
Residential Status
Fees
Notes
IVA
Yes - Average 58%
Yes
Stopped
Tenant or Homeowner (Eng/Wales)
Yes on average around 20% of the payments you make to creditors
Typically you must have debts over £15,000 and be able to offer yourcreditors about 20% of the value of the debt back over 5 years.
Debt Management
No
No
Many Freeze
Tenant or Homeowner
Yes
In a Debt Management Plan, you will be required to repay all of your debt in full.
Consolidation
No
Yes
New Rates & Charges
Tenant or Homeowner
Yes
Consolidating your debts generally means you'll pay more back over a longer period of time.
Bankruptcy
Yes
Yes
Stopped
Tenant or Homeowner (Eng/Wales)
Yes - up to £700 depending on your circumstances. You may also be subject to a 3 year Income Payments
You need to think carefully about all the affect bankruptcy will have on your home and your employment.
Debt Relief Order
Yes
Yes
Stopped
Tenant
Yes - £90
You must have debts under £15,000 and have little in the way of assets