At the IVA Advisory Centre we understand that every situation is different
Here’s a breakdown of Mike’s story, who was recommended an IVA.
Total unsecured debt
Old monthly payment
New monthly debt repayments
Debt written off
What is an IVA?
An Individual Voluntary Arrangement, or IVA, is one way for people to get back on top of their unsecured debt repayments.
It is a formal agreement between you and your creditors that can help you repay your debts in an affordable way. You'll make repayments over a fixed term - usually five years - and your interest and charges are also frozen.
An IVA will affect your credit rating for six years from the start date.
If you come into any money during your IVA – through a pay rise, a bonus, or inheritance – you might have to put at least some of it towards your debt. At the end of an IVA, any remaining debt included in the IVA is written off along with the interest and charges.
Once a proposal has been put together, it’s sent to your lenders and they’re asked if they’ll accept the reduced payments.
IVA’s are subject to eligibility and creditor acceptance. Alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your credit rating may be affected. Details of the IVA will be entered on a public register. Homeowners may be required to release the equity in their property, which may result in the ability to obtain a mortgage being restricted and is likely to be on less favourable terms. If you can’t remortgage the IVA could be extended by up to 12 months. There will be restrictions on expenditure whilst in the IVA. Not available if you live in Scotland.
How does an IVA work?
Once accepted, you make one, affordable payment.
The payment is then distributed to your creditors.
On completion, all debt included is written off.
Protect your home
IVAs are available to homeowners and tenants
One of the main advantages of an IVA is that your new lower payments will leave you with enough money to afford all of your other essential bills and expenses. When we work out how much you can afford to put towards your IVA, we will factor in your rent, so you always have enough to pay for the roof over your head while you pay your debts off.
If you're a homeowner, you won't have to sell your house and you will always be left with enough money to cover your mortgage payments.
Everyone has a unique story
Our team will listen to you
Our advice is confidential and we won't pass your information on to anyone.
Our team is dedicated to helping you
You'll always get personalised and professional help and advice from IVA Advisory Centre.
Our team can help you build a brighter future
Our staff is passionate about getting you debt free.
Frequently asked questions
How does an IVA work?
Our experienced advisors will look at your financial situation with you and work out, based on your monthly income, what you can realistically afford to pay towards an IVA.
A proposal will then be prepared for your lenders. This will include:
- Details of your finances
- The terms of the proposed IVA
- Reasons why they should agree to your IVA
Your proposal will then go through the following process:
- Your lenders will vote on whether to accept the proposal (in most cases they will)
- Once accepted, the IVA will be legally binding for you and your creditors
- You’ll start making your months payments for the agreed term
- After your last payment, any outstanding debt, including interest and charges, will be written.
Please note, if your IVA fails, you would be at risk of bankruptcy.
Will an IVA affect my job?
For most people, an IVA will not affect their job.
Keep in mind though, that some employers can have rules against employing people in certain positions who are on an IVA, or have been in the past.
Your job can be affected:
- if you're responsible for money, e.g. an accountant, or
- if you advise people about their money e.g. a mortgage advisor.
Our advisors will be able to tell you if your job is likely to be impacted.
Will lenders stop chasing me?
Your lenders will have to stop contacting you and chasing you for payments if your IVA is accepted.
Your lenders won't be able to take any further legal action against you.
Will people know I'm on an IVA?
An IVA is a private agreement between you and your lender. You don't have to tell anyone that you're on an IVA, if you don't wish to.
Your details will be added to the Insolvency Register until three months after your IVA ends. This register is publicly available, however someone would have to search for your details to find them.
Will my home be affected?
You don't have to worry about your home. It will be safe on an IVA.
You might be asked to release equity by remortgaging in the last year. If you're unable to, your IVA could continue for up to another 12 months.
If you're a tenant, your new monthly payment will leave enough money to cover your rent.
What debts can go into an IVA?
You can pay off any of your unsecured debts with an IVA.
- Personal loans
- Credit and store cards
- Catalogue debt
- Council Tax arrears
- Benefit arrears
You can't pay off any secured debts, like your mortgage, through an IVA so you will need to continue to pay these.
Your monthly IVA payments will take these into account though, to make sure you have money available to pay them.
We’ll review your situation, explain your options, and recommend the solution that’s right for you. And our advice is free. If you want to set up your debt solution, we’ll refer you to one of our trusted providers. If you decide to use their services, we’ll be paid for introducing you or for the preparatory work we do.