If you are struggling to pay off debt, there are options available to help. One of those options is an individual voluntary arrangement (IVA). This is a legal contract held between you and creditors in which the purpose is to help pay off your debt. This was initiated by the Government in 1986 to give creditors a way to recover some money – more than they would with a bankruptcy claim.
But when trying to take control over your debt, jumping into an IVA is not an easy decision. It is a legal contract in which you are in for usually five years. It will be on your credit file for six years, making it more difficult to borrow money. On the other hand, though, IVA is an affordable way for many to repay significant portions of their loans.
We are here to answer all your questions about an IVA. To get you started, we’ve laid out a few points to provide all the IVA help you need to decide if this option is the right one for you.
The Good Candidate
Although this isn’t a checklist you must pass, these are a few guidelines that suggest an IVA may be a good option for you to take:
- Your debt to creditors is over £15,000 and is between more than one creditor.
- After paying off expenses, your disposable income is £100 or more.
- You don’t want to handle your debt alone.
If you find yourself fitting into one of these categories, then an IVA could be a viable solution for you and your debt.
The Not-So-Good Candidate
An IVA is not for everyone. If the following points hit close to home, you might want to rethink using an IVA as your debt solution:
- You do not have enough disposable income available for your monthly payments.
- You only owe money to one creditor, not multiple.
- You work at a place that prohibits going through an IVA (for example, in the accounting industry).
- You do not have consistent long-term work as an IVA is a long-term
There are many good reasons why an IVA will help your debt situation. One of the most significant benefits of an IVA is it is considered an affordable way to pay off a majority of your debt. The payments are set up in a way that you can afford to keep up. On top of that, a good portion of your debt has the potential to be written off.
Going through an IVA compared to something like bankruptcy means you still retain control over valuable assets. So you won’t have the feeling of losing everything. The idea is to get you back on your feet and to set you up financially to continue with life.
So if you think an IVA is a solution to your debt problems, talk to one of our advisors today to get you on the path. We want to help put you on the road to financial recovery.