Debt IVA, and the BIG question - is it for you?

"Debt IVA" is a popular online search because the IVA since its introduction in 1986 has become a really popular debt solution. So much so that in 2008 one was started on average every 13 minutes. But the question is not whether an IVA is a good debt solution, but whether it is the right debt solution for you.

There are 4 main debt solutions: loans, debt management, IVA's and bankruptcy. The decision as to which is best for you rarely comes down to preference, and is actually about suitability.

When advising on which debt solution is going to be best, there are some really clear criteria that can be used:

  1. Which debt solutions would you qualify for?
  2. Which debt solution is going to mean you pay off your debts fastest with the least possible money?
  3. Which debt solution would protect you property and other possession?
  4. Which debt solution would last for a fixed period of time as opposed to keep running with no end point?
  5. Which debt solution is going to minimise damage to your credit rating?
  6. Which debt solution is going to have the least impact on your professional career?

Before you can know any of the above a detailed assessment of your debts, your income and expenditure to work out how much you could afford to repay your creditors every month for 5 years needs to be worked out. If that amount is over 25% of you total debt, you're employed or self employed, and owe 3 or more creditors £15,000 or more, there's a chance that an IVA is a debt solution you may want to use.

Applying for an IVA

To get immediate help now, use our IVA advice service which is accessed via charity advisors.


Summary

What is an 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 any
  • 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  
 
Average 58%*
Yes
Stopped
Tenant or Homeowner (Eng/Wales)
  
 
Not Normally
No
Many Freeze
Tenant or Homeowner
  
 
Consolidated
Yes
New Rates & Charges
Tenant or Homeowner
  
 
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.
  
 
*58% was the average debt write off with an IVA, April - June 2008, CCCS
  
     

 

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