If you are struggling with severe debt problems – usually £15,000 or more – sometimes an IVA (Individual Voluntary Arrangement) could be the right solution for you.
An IVA involves making reduced monthly debt repayments to your creditors, this will be based on your available income, usually for five years. Once the IVA is finished, your remaining debt will be considered settled.
Who is an IVA best for?
An IVA is best suited to people with very large debt problem that will not be repay within a realistic timescale. They are a legally-binding debt solution, an IVA requires full commitment to repaying your debts. Your payments will be based on how much you can afford after paying your essential household costs, meaning you will be left with no disposable income for the duration of the IVA (usually five years).
An IVA is widely considered a preferable alternative to bankruptcy, since it avoids several of the disadvantages. For example, unlike bankruptcy, you will not lose your home, although if you are a homeowner you will be expected to release some of the equity in your home in the 54th month of the IVA.
Should I consider other debt consolidation?
Before choosing any debt solution, you should always speak to an expert debt adviser. They will be able to discuss your situation with you to help decide the best course of action. Just because you have debts of £15,000 or more does not necessarily mean that an IVA is the most appropriate debt consolidation – it really depends on your circumstances. So long as you can afford to repay the debts in a realistic amount of time, another debt solution, such as debt consolidation or a debt management plan, might be your best option.
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