IVA (Individual Voluntary Arrangement)
With an IVA, you could have:
- Lower debt repayments that fit around your other commitments
- One affordable monthly payment
- Unaffordable unsecured debts written off
One affordable repayment towards your unsecured debts
An IVA makes unmanageable debts affordable again. By reducing your unsecured debt repayments to an affordable level and combining them into one monthly payment, you can be sure you'll have enough left over for your bills and other commitments.
Writes off the unsecured debt you can't afford
Once you've made your final IVA payment (normally after five years), the rest of your unsecured debts will be written off.
Stops demands from lenders
An IVA is legally binding - so once it's agreed your lenders can't take any further action against you, as long as you keep up with your payments (and stick to the other terms).
How an IVA works
An IVA is an agreement with your lenders that can make your unaffordable debts affordable again and help you avoid bankruptcy.
We'll contact your lenders to arrange lower monthly payments towards your unsecured debts, based on what you can afford. They don't have to agree to this, but there's a very good chance they will if it's clear your debts really are unaffordable.
The agreement lasts for an agreed period - normally five or six years, depending on your circumstances. Once you've made your final payment, any unsecured debt you haven't repaid is written off.
Is it right for me?
An IVA could make a big difference if you simply can't afford to repay your debts in full within a reasonable period of time.
A lot of people think bankruptcy is the only option for dealing with unaffordable debts, but an IVA is an alternative that could help you to stay in your home and, in some cases, repay more of what you owe.
But your lenders will only accept an IVA if you really need it, and you must still be able to commit to regular monthly payments. There are other debt solutions that could help if an IVA is not right for you.
Final points
An IVA could offer a way out if you're struggling with unmanageable debt, but it will affect your credit rating. If you're a homeowner, you may also have to release equity from your home in the final year of your IVA to help repay your debts.
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