THE ADVANTAGES OF AN INDIVIDUAL VOLUNTARY ARRANGEMENT

1. Single Affordable Payment

An IVA allows you to make a single affordable payment, based on your disposable income, to your creditors each month. This payment is paid directly to the Insolvency Practitioner who will share out the money to your creditors on you behalf.

2. Debt Written Off

The IVA lasts for a fixed period of time (normally no more than 60 months). In addition, once the final payment is made, any outstanding debt is legally written off by the Creditors. This means that you know when your debt problems will be resolved once and for all giving Light at the End of the Tunnel.

3. Interest Frozen

Creditors are legally bound to the agreement. They cannot go back on the agreement and demand increased payments. They must also freeze all further interest and charges.

4. Legally Binding Agreement

If you have any debts which are already Count Court Judgements (CCJs) these can be included within an IVA. If you are currently paying an attachment of earnings, this too will be overturned by the IVA. As long as you maintain your IVA payments, then none of the creditors included within your IVA will be able to take any additional legal action against you to try and claim back their debt.

5. Discreet Procedure

An IVA is a discreet procedure and can be used by professionals, forces personnel and the police without damaging career prospects. An IVA is not advertised in the local newspaper or the London Gazette unlike Bankruptcy. 

However, it is important to be aware that if you enter into an IVA, your name will be added to the insolvency register which is publically accessible via the internet. To review the insolvency register, please see the "Useful Links" box below. 

Where to start

• Choose the solution – Use the “Which way should I turn” form to get your FREE DEBT REPORT
• Ask the experts – use the Beat My Debt Forum
• Call us now – speak to one of our advisors in confidence to see if an IVA can work for you.

Take the first step to beating your debt NOW – Call us free on 0800 077 6180

THE DISADVANTAGES OF AN INDIVIDUAL VOLUNTARY ARRANGEMENT

Although the advantages of an IVA are significant, undertaking an IVA is a serious matter. As such, there are some things that you must bear in mind when thinking about an IVA:

1. Credit Rating Effected

The IVA will be recorded on your credit file. This means that you will not be able to take further unsecured borrowing for the period of the IVA. Once the IVA is completed (normally after 5 years), you can borrow again. However, it may take some time for your credit rating to repair.

2. Home Equity Must be Released

If you are a home owner, during the course of the IVA you may have to release available equity from your property to increase the overall settlement offer to your creditors.

3. Name included in Insolvency Register

Whilst your name is not published in the newspaper, it should be pointed out that the IVA will be entered onto the government insolvency register, which is a searchable public database.

4. Failure may result in bankruptcy

If you fail to adhere to the terms of the IVA, bankruptcy proceedings may be taken against you. As such, your home and other assets may be at risk.