INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to repay your debts over a set period. It can be structured based on your financial situation:
- Monthly Payments: Make monthly payments based on what you can afford, or
- Lump Sum Payment: Pay back a lump sum if you have access to the funds (no set up fees to be paid before your IVA is agreed).
*May not be suitable for all circumstances. Fees apply. Your credit rating may be affected.
Benefits
- Pay monthly amounts based on what you can afford.
- The remaining unpaid balances of your debts may be written off after you make your final payment.
- Interest, charges and debt collection stop meaning your debt amount does not increase during the IVA.
- An insolvency practitioner manage the IVA and communicates with your creditors on your behalf . Creditors included in the IVA cannot take legal action against you.
Risks
- Your creditors could request that you reduce your living costs to maximise your payments.
- You may be required to sell any valuable assets.
- If you own property, you might have to remortgage to release equity for the IVA.
- The IVA will be recorded on a public register and will impact your credit file for up to 6 years.