Clear your debts with an IVA

An IVA (Individual Voluntary Arrangement) is a way to write off the debt you can't afford without declaring bankruptcy. If you're in a 'debt spiral', an IVA could bring your finances back under control - and give you a clear date when you know you'll be debt-free.

With an IVA, you could:

• Write off the debt you can't afford to repay
• Clear your debts in 5 years (in most cases)
• Reduce your monthly payments
• Protect your home (tenants & homeowners)
• Prevent (further) legal action, including bankruptcy

An IVA is a legally binding debt solution that's designed to help you clear your debt - probably a lot faster than you thought possible.

It's a formal agreement between you and your creditors. If you pay what you can afford for (in most cases) five years, they'll write off whatever's left at the end of the IVA.

If your debts are so serious that you're really worried about bankruptcy or repossession, an IVA could be the best way for you to clear your debts without declaring yourself bankrupt, losing your home or struggling to pay more than you can afford each month.

An IVA can answer all these questions:

How can I afford my monthly payments?

Will I have to repay all my debt?

What if my creditors try to make me bankrupt?

Will I lose my house?

Will I ever be debt-free?

Q. How can I afford my monthly payments?
A. Payments to your IVA would be based on what you can afford on a monthly basis. If your income has dropped and/or your debts have grown, this can make an enormous difference to your daily life.

Q. Will I have to repay all my debt?
A. It's extremely rare for someone in an IVA to have to repay all their debt - and you'd know in advance exactly what you'd be signing up to.

Q. What if my creditors try to make me bankrupt?
A. Once the IVA has started, creditors would not be able to take any legal action against you. If they've already started action, they'd have to put a stop to it.

Q. Will I lose my house?
A. You're extremely unlikely to lose your house in an IVA. In fact, it should help you stay in your house, as your IVA payments would be calculated to leave you enough for your mortgage/rent payments - as well as food, petrol, clothing and all your other essential expenses.

Q. Will I ever be debt-free?
A. Yes - you'd even know exactly when. As long as you can stick to your side of the agreement:
  a. Your creditors won't be able to change their minds.
  b. Your payments won't increase (unless you earn more).
  c. Your debt won't grow.
  d. Your IVA won't last longer than you expected.

How do I start an IVA?

Call one of our debt experts today on freephone 0800 074 8639. Talk them through your financial situation and they'll tell you if an IVA is likely to be the best solution to your money worries.

If it is, you'll work with one of our Insolvency Practitioners (IPs) to draw up an IVA Proposal - a formal plan which we can submit to your lenders, so we can find out if they'll agree to the terms of the IVA.

What happens next?

If enough of your lenders agree, your IVA can start. As long as you keep up your side of the agreement, your IVA will come to an end five years later - and your debts will be gone.

Are there any drawbacks to an IVA?

An IVA is a form of insolvency, and will have a serious effect on your credit rating for six years from the time it starts, making further credit more expensive and/or harder to find during that time.

You may have to contribute a portion of any additional income you receive (such as overtime or bonuses).

If you're a homeowner, you'll probably have to release equity from your home in the final year of your IVA. On the other hand, you're extremely unlikely to have to sell your home.

Plus, an IVA requires commitment. No-one can see the future, but if you can't be reasonably sure you'll be able to keep up with your payments, an IVA is unlikely to be the best way for you to clear your debts.