Individual Voluntary Arrangement
Individuals who are struggling with debt may feel like they have nowhere to turn, but there are options available.
One such option is a voluntary arrangement, which is a legally binding agreement between an individual and their creditors. This type of arrangement can provide some relief from debt repayments, and can also help to protect an individual's assets.
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What is an IVA?
An Individual Voluntary Arrangement (IVA) is a legal agreement between you and your creditors to pay off your debts. This arrangement is usually set up by a licensed insolvency practitioner (IP). An IP is someone who is authorised by the government to help people with their debt problems.
An IVA can help you by giving you a way to pay off your debts over a set period of time, usually 5 years. This guide will help you understand what an IVA is and how it can help you resolve your debts.
Benefits and Risks
Benefits of a IVA:
You make affordable monthly payments, usually over five or six years
If you’re a homeowner you’ll usually be able to keep your home, as long as you maintain the mortgage payments and any secured loans on your property
There are no up-front fees, and we won’t charge you for debt advice
Once your IVA is set up, there will be fees set by your creditors, which you’ll pay in your monthly repayments
If you have a lump sum to offer, this can be paid as a one-off ‘full and final’ settlement, or a combination of a lump sum payment followed by monthly payments
Once you've made your final payment any remaining unsecured debt is written off and your creditors can't pursue you for payments
Risks of a IVA:
If there’s equity in your home, you’ll need to try to re-mortgage which may result in a higher interest rate
If you're unable to re-mortgage you can make a maximum of 12 extra payments or a third party can offer a sum equivalent to the equity
If your IVA fails, creditors may request the supervisor of your IVA petitions for your bankruptcy, however this is very unlikely to happen.
Your credit rating will be negatively affected
At the end of your IVA, only unsecured debts included in the arrangement will be written off. Any not included will remain outstanding
Your IVA will be recorded on a public register
How do I apply for a IVA?
The first step is to see whether an IVA is right for you. To do this use our free online calculator or call us and speak to one of our expert advisors.
If an IVA is the best solution to your debt problem our specialist Debt Advisors can help you through the set up process.
We'll review your case and advise if an IVA is suitable for you.
Other debt solutions you could qualify for:
Why choose National Debt Advice?
We can reduce your monthly payments!* Not only that but we're:
An FCA Regulated Debt Counselling Service
Have a 24/7 Live Chat Support
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We give impartial and confidential advice
*Monthly payments are based on individual financial circumstances.