How Individual Voluntary Arrangements (IVA) can help you manage your debt

By Mr Bankruptcy

3rd June 2019

There’s often a feeling of lack of clarity and being out of control when debts become unmanageable, and this quickly piles stress onto what’s already a difficult situation. However, making an IVA to consolidate your debts can help you to take control of your life again.

What is an Individual Voluntary Arrangement (IVA)?

An IVA is an agreement reached with your creditors that determines how much needs to be repaid over a specific amount of time. It’s a legally binding arrangement which you and your creditors must abide by.

What debts can be covered by an IVA?

IVAs can be used to cover most debts, which are usually unsecured, such as:

● Personal loans

● Payday loans

● Council tax arrears

● Income tax and national insurance arrears

● Store cards

● Credit cards

● Catalogues

However IVAs won’t usually cover mortgage repayments and some other, such as court fines, child support arrears or some hire purchase agreements.

How does an IVA work?

To put an IVA in place you need the help of a qualified insolvency practitioner to act on your behalf. They will assess what is a practical level of regular payments given your personal circumstances and negotiate with creditors to get an agreement in place. See my earlier blog post about getting professional advice.

Creditors usually take assurance that the oversight of an insolvency practitioner means realistic terms are being negotiated. It could also mean you don’t end up repaying the full amount of debt because the repayment is reassessed on what you can afford, allowing for essential living costs.

Under the IVA multiple debt repayments are consolidated into a single payment, which is particularly helpful if you have more than one creditor, with agreements usually lasting for five years. After this period the arrangement with creditors will end and debts will be repaid.

Why are IVAs a good debt management option?

An IVA offers a sense of relief and reassurance as it means:

● You no longer manage multiple debt payments because they are consolidated into one

● Repayment is based on what you can afford

● Interest and charges on debts are frozen so they don’t continue to increase

● You are protected against creditors taking legal action once the agreement is in place

● At the end of the IVA period all debts covered by the arrangement are either repaid or written off, so there’s no burden of ongoing debts

● The insolvency practitioner will work with your creditors so you don’t have to deal with them directly

What should you consider before agreeing to an IVA?

As with all debt management solutions, you’ll need to consider whether an IVA is the best approach for you. For example, if you’re a property owner you may need to re-mortgage your home, and if you come into money, this may need to be paid against your debts.

An IVA can also affect some jobs. Seeking advice from a specialist practitioner will help you make an informed choice regarding an IVA, or find a more suitable alternative to help you become debt free in the best possible way.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors facing unmanageable debt or involved in civil or commercial disputes.

Our services include:

● Insolvency support

● Negotiated settlements

● Personal assisted bankruptcy

● Mediation

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.