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Free IVA

Free IVA

A “Free IVA” is what most good IVA companies promise, and they are sort of right. Sort of, because the money your IVA company and Insolvency Practitioner need to pay their bills is coming out of your new lower repayments. This means not all of your lower monthly repayment is going to your creditors as they have agreed the case management fee.

Because the process of getting you to a stage to where all the paperwork is in place and there can be a ‘meeting of creditors’ to agree or decline your IVA proposal takes time and investment, some less reputable companies try and charge for the application process. It’s our advice that you stay away from these IVA companies. The good ones don’t charge as they select people who are likely to be successful in getting the IVA accepted because it was the best solution for the individual and the creditors.

Our charity advisors will ensure that if an IVA is best for you, you get to apply for an IVA via one of the UK’s best IVA companies. 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

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