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debt IVA

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:

  • Which debt solutions would you qualify for?
  • Which debt solution is going to mean you pay off your debts fastest with the least possible money?
  • Which debt solution would protect you property and other possession?
  • Which debt solution would last for a fixed period of time as opposed to keep running with no end point
  • Which debt solution is going to minimise damage to your credit rating?
  • 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. They are experts in assessing whether an IVA is the best solution for you and helping you organise one if that’s what you want.

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

 

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