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What Is An IVA?

An IVA is a formal financial solution which enables people to have their debts consolidated (monthly bills) for a period of what is usually 60 months (unless there is equity in the property in which case it may be extended for one year), after such a time, the remainder of the debt is written off.

How Does The IVA Change Things – How Does This Look In Practice?

Example Savings On An IVA: 

Before An IVA: Mark is currently paying £850 on his unsecured debts, this includes loans, credit cards, and catalogue debt, this is an unsustainable amount of money each month to be paying out towards £14,500 of unsecured personal liabilities.

On An IVA: Mark is currently paying £250 towards his monthly debts in a legally protected debt arrangement which is covered by what is known as an ‘interim order’ which is a legal injunction which protects the person in debt from creditor and bailiff hassle and further legal action, not only is Mark paying a reduced amount per month, he is also in a position to write off up to 85% of debt once the IVA is completed.

How Long Does It Take To Setup An IVA?

An IVA can often be set up within 3-4 weeks if things run smoothly and there are no disagreements or points of contention from creditors (75% of the creditors who you borrow money from must agree to the terms of the IVA) we are specialists in facilitating this, and most creditors

People in debt can benefit from the interim order (the legal injunction which protects you from creditors) early on in the IVA setup as the application for this is sent off as it is being set up.

This means you can get your creditors off your back quickly (and bailiffs) and get on track to becoming debt free.

Are There Any Fees At The Beginning Of The IVA?

The only monies payable during the IVA are the monthly contributions made each month to repay debts.

There are no upfront fees or setup fees or extra fees during the course of the IVA.

Are There Specific Rules And Regulations In The IVA?

The main requirement in the IVA is to stick to the monthly repayments on schedule, however these repayments are agreed before the arrangements are put in place to ensure affordability and a certain level of livable disposable income per month whilst on the IVA.

IVA Advantages

Fixed end date of becoming debt free

Fixed monthly repayments that are legally binding which protects you from creditor and bailiff hassle

  • Freeze any existing legal procedures and CCJs
  • Huge amounts of debt written off, in some cases up to 85% of debt can be wiped
  • No more creditor or bailiff calls or visits
  • Reduced payments will make the debt easier to pay and more manageable
  • No need for bankruptcy, avoiding bankruptcy and the nasty side effects that come with it such as credit limits and severe adverse effects to the credit file

IVA Disadvantages

Binding arrangement – if you break the arrangement it can spell trouble with creditors and they may (with enough disruption) petition for personal bankruptcy

You must keep to the strict schedule of repayments which means a certain amount of financial restraint.

Still shows up on credit file but could be much worse if left unchecked without an IVA.

How Can I Get Started On An IVA?

Get in touch with us for a free, no obligation assessment of your debts and finances to see if you are suitable for an IVA.

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