An Individual Voluntary Arrangement (IVA) is a legal agreement between you and your unsecured creditors. You pay back an affordable monthly amount for a set period of time, usually 5 or 6 years. After this period of time, any remaining debt will be written off.
We will assess if an IVA is suitable for you as not everyone is eligible. For instance, you must have regular household income, live in England, Wales or Northern Ireland. (If you live in Scotland, see Trust Deeds).
Once an IVA is accepted, you will benefit from:
One single consolidated payment to your unsecured debts
An affordable monthly payments based on what you can afford
Frozen interest and charges
Full protection from your creditors - they cannot chase you for their debt
A fixed agreement usually lasting 5 years, after which any remaining unsecured debt in the IVA is written off
Protection from legal action by creditors
Protect your home from creditors if you are a homeowner
Things to consider:
If you don’t stick to your agreed terms your creditors could take action against you and interest may resume on your debts. If the arrangement fails you could be at risk of bankruptcy.
There are restrictions to your expenditure we have to adhere to and if you have assets then you may be asked to make these available to your IVA e.g. savings plans.
If you are a homeowner you may be asked to remortgage your property in the 5th year of your IVA, to release any equity to creditors. If a remortgage is not available an IVA can be extended for 12 months.
An IVA will appear on your credit file for up to 6 years from the date it commences.
During this time it may be difficult for you to obtain credit and you may be subject to higher rates of interest. Creditors do not have to approve the IVA.
Any unsecured debts that were not included would remain outstanding.
An IVA will be recorded and entered on to a public register.
Example of an Individual Voluntary Arrangement
Total Debt Level:
Debt Repayments BEFORE IVA:
£608 per month
Monthly Payment reduction:
£477 per month
New IVA Monthly Payment:
£131 per month
Proposed Debt Write Off Amount:
This example is based on a 60 month IVA and is for illustration purposes only. Your results will vary based on your personal situation.
Get advice before you apply
Speak to us before taking out an Individual Voluntary Arrangement to make sure it’s the best option for your needs. If we think an IVA is the right option for you, we will help prepare your application and refer you to an insolvency practitioner who will set up the Individual Voluntary Arrangement for you without charging an advance fee.