IVA is short for Individual Voluntary Arrangement. An IVA can be a successful debt management solution to those with debts over £10,000 who feel as though they cannot afford to repay their debt in full yet wish to avoid some of the long term implications attached to declaring bankruptcy, such as losing their home.
If you are struggling with unmanageable debt then it is essential that you get professional debt advice, as this expert guidance should be able to offer you more information about the debt solutions available and whether an IVA is the right debt management solution for you.
There are a few fundamental points which you need to understand about IVAs. First of all, they are only available for resident of England, Wales and Northern Ireland, so people based in any other country are automatically not eligible for one. If you are a resident of Scotland, your similar equivalent will be a Trust Deed which can offer you similar benefits to an IVA and we can offer you more information about these.
An IVA is only suitable for those with debts over £10,000 over multiple creditors. These debts must also be unsecured, so many include debts such as credit cards, store cards, overdraft and catalogue debts. Secured debts, such as mortgage, cannot be included in your IVA but payment for these will be taken into consideration when working out how much you can afford to repay to your creditors through the IVA.
You must be able to commit to repaying a reasonable but affordable monthly payment to your creditors, therefore you will need to be employed in some capacity. It is essential that you keep up ton date with your IVA repayments or else your creditors can declare you bankrupt.
An IVA is a legally binding agreement which allows you to repay your creditors a lower monthly payment to your debt over a typical time duration of 60 months. The IVA means that you can resolve your debt problem by paying only what is affordable to you over the specified time-frame, and agreed by your creditors. On completion of the IVA you will become debt free.
It is essential that, if you believe an IVA is the right debt management solution for you, that you do your research. You need to fully understand what being on an IVA entails and that you are aware of all the potential benefits and considerations of the agreement.