What is an IVA?

IVA stands for Individual Voluntary Arrangement and is a legally binding agreement between you and your creditors. This deal means that the creditors will take monthly payments at a price that you are able to afford however, this doesn’t include your mortgage or other loans attached to your home. But be warned the monthly payments can be on the rather high side!

You can get an IVA by contacting a licensed insolvency practitioner who will represent you and can legally negotiate you debts with your creditors. Most people convinced in taking advantage out an IVA when they think that there is no reasonable way they are going to be able to pay off their debts. However, remember that there are other options available to you.

An IVA usually takes over five years to see you debt free but there are many advantages to it. You can stop interest and any additional charges on your unsecured debts, you can write off any debt you will be unable to pay within your IVA, avoid bankruptcy, make you monthly payments more affordable, and cease any unwanted contact from your creditors. An IVA can be an alternative to bankruptcy. However, it may not prevent your home from being sold!!!! Take advice and check the contract to see if your home is included in an IVA

At the moment an IVA may seem like a highly attractive option to get debt free but there are down sides to IVA. An IVA can last around five years so you need to understand that this is a long term process and a big undertaking, so be sure you’re ready to commit to one before you do. There is also very little margin to reduce payments or miss payments. In some cases if an IVA fails, the IVA company can also apply for your bankruptcy!

The exact details of an IVA differ from person to person depending on their financial situation but you can work out yours with your insolvency practitioner. Remember, an IVA is not a cure too all debt problems but it might be right for you and is certainly worth investigating.

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