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.
- 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
Find Out More About The Debt Solutions Considered
|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|