Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement or IVA is a legally binding contract between a debtor and their creditors, supervised by a licensed insolvency practitioner to repay your creditors at an amount you can afford on a monthly basis over 5 or 6 years. When the final payment is made, any remaining debt is written off.
Pros of an IVA
- Consolidate all of your unsecured debts
- Fixed 5 year term (can be 6 if you are a home owner)
- Freeze your interest and charges
- Protects from creditors
- Confidential procedure
- Prevents bankruptcy
- Reduce your monthly outgoings in line with what you can afford
- Protects your home from creditors if you are a homeowner
- Stop letters and phone calls from your creditors
Cons of an IVA
- Legal binding you will be tied into the agreement for the full term.
- Your details will be recorded on the insolvency register.
- At least 75% of creditors must agree to the IVA
- You will not be able to get additional credit of more than £500 without your supervisor’s consent
- Homeowners will need to look into releasing equity from their home
- Failure to comply with the IVA may lead to bankruptcy
- Your credit file may be affected for six years
- Certain debts will still be outstanding.
Fee are payable with an IVA solution. Back2credit will pass you through to one of our trusted partner companies and we will be paid a fee should you take up any IVA solution with them.