What does IVA stand for?

"what does IVA stand for" is a popular search term because there is so much confusion over this debt solution. 

IVA stands for Individual Voluntary Arrangement. It's one of the 'Big 4' debt solutions and it's been around since 1986 when the government introduced it as an alternative and supplementary solution to bankruptcy. This means that an IVA offers an opportunity of getting serious debts under control for tens of thousands of people every years.

Like bankruptcy and IVA is an official solution that involves IVA companies, and Insolvency Practitioners and once set-up is legally binding. However it does offer many unique advantages. The biggest and most popular of these is the ability to write off the part of your debt you simply can not afford to repay. On average this works out at about 50% but can be as high as 75%. You then pay the balance of what you owe over 5 years with your monthly repayments going to the Insolvency Practitioner managing you arrangement.

To to eligible for an Individual Voluntary Arrangement you  have to have debts of £15,000 or more, owe more than 3 creditors money and be in full time employment or have a partner working. 

Applying for an IVA

If you apply for an IVA, our charity advisors will help you ensure you get to use a company offering a free IVA. Give them a call and see whether an IVA is for you and who's the best IVA company to manage your IVA application.

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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