Individual Voluntary Arrangement (IVA)
(DOES NOT COVER FOR SCOTTISH RESIDENTS)
An Individual Voluntary Arrangement, or IVA, is a formal arrangement to make an affordable payment over a fixed period.
IVA – ADVANTAGES
- An IVA offers you legal protection from your included creditors.
- An IVA usually has a fixed term of 60 months/ 5 years, and at the end of the arrangement, any
outstanding balances on included debts will be written off.
- The payment you make into an IVA is based on your Income and Expenditure so should always be affordable to you.
- There are no upfront fees; fees are incorporated into your monthly IVA payments and vary between IVA companies.
- Interest and charges on included debts will be frozen.
IVA - DISADVANTAGES
- Any debts not bound by your IVA will remain outstanding and you are responsible for keeping up with their repayments.
- Your credit file will be affected for a period of 6 years, starting when the IVA is approved. Your ability to obtain credit will be restricted for the period of the IVA
- An IVA can impact on certain jobs such as those in finance and the Civil Service - if you are unsure check your employment contract.
- If you are a homeowner, you may be asked to re-mortgage 54 months into the IVA, which may incur higher interest rates than your previous mortgage. If this is not possible, you may be required to extend your IVA by a further 12 months.
- Failure to keep up with IVA payments may result in your creditors filing for your bankruptcy.
- Your details will appear on a publically searchable record.
- Your creditors may not agree to your IVA which may stop the arrangement from going ahead.
- Your expenditure will be restricted.