An IVA is a formal and legally binding agreement between you and your creditors to pay back your debts over an agreed period.

An IVA is set up and managed by an Insolvency Practitioner (IP). It is a form of insolvency which allows an individual to pay back a certain percentage of their unsecured debt in affordable monthly instalments are paid back over a fixed term.

Once you enter an IVA, creditors can take no further action against you. However, your credit rating will be affected for six years and your information will be visible on the public Registers of Insolvencies for the duration of the IVA.

If you live in England, Wales and Northern Ireland, an IVA is an option available to you. Scottish residents can look to enter into a Trust Deed.

Advantages of an IVA

  • All interest and charges are frozen
  • No further contact from unsecured creditors
  • You are supervised by your IP who help you prepare
  • Make one affordable monthly payment each month
  • You’ll never be forced to sell your home in an IVA
  • All of your remaining debts will be written off at the end of your IVA

Disadvantages of an IVA

  • You will have spending restrictions put in place for the duration of your IVA
  • Creditors may not approve your request for an IVA. 75% of your creditors need to approve.
  • Not all debts can be included in an IVA. These include student loans, any child support or court fines.
  • If you come into any funds over £500 during the IVA term, they will be introduced into the agreement.
  • If you fail to make your payments your IVA could fail.
  • Your credit rating will be affected for 6 years.
  • There’s a possibility of having to release equity from your property.

Get in touch with us about an IVA today