Why should I choose an IVA?

An IVA can help an individual who is struggling financially, and is a possible alternative to another possible option,  bankruptcy., which can be a disaster for some people.

An IVA, or Individual Voluntary Arrangement, is a legally binding contract between you and your creditors. This contract requires you to make single monthly payments on your debts over a fixed period of time, usually 60 months. The debt remaining after the fixed period is written off provided you meet your payment schedule in full.

Why choose an IVA?

An IVA is for some a better alternative to bankruptcy, especially if they are in a profession where they will lose their job or status once they have been declared bankrupt. If you you are found to be eligible for an IVA, it may be the best alternative you have, and the first step to financial stability.

How does an IVA work?

If you are likely to qualify for an IVA, an IVA proposal is arranged by an Insolvency Practitioner (IP), who will help you negotiate  a monthly payment regime with your creditors that will pay off your outstanding debt. These payments are based on factors such as your monthly earnings, your living expenses, and your debt.

This IVA proposal also gives you protection against demanding creditors. Once accepted, creditors cannot take further action regarding payment of declared debt as the IVA contract is legally binding on all parties.

What are the benefits of an IVA?

An IVA can benefit some people aside from those who want to avoid bankruptcy at all cost. Firstly, your remaining debt after 60 months will be written off. Also, instead of making multiple payments, you make one fixed monthly payment towards all your debts. These payments will be negotiated to match your financial situation. Lastly, all interest and charges will be frozen on your debt.

Is an IVA better than bankruptcy?

In some cases IVAs are better alternative  to bankruptcy; it really depends on your financial situation and your profession. For instance, if you are a homeowner opting for an IVA, there is a reduced risk of losing your home. Also, an IVA is a private agreement between you, and your creditors, negotiated by your IP. Bankruptcy, on the other hand, is a public process whereby your finances and assets are no longer your own. When it comes to IVAs, the implications and losses are not as restrictive and drastic as filing for bankruptcy.

Free IVA Advice 

For free advice and information contact our One Advice IVA team on 0800 048 1768, or take the IVAs 1 Minute Debt Test to see what debt solution is right for you.