Under an IVA, or individual voluntary arrangement, you make a monthly payment towards your debts based on what you can afford to pay. The cost of your IVA will be included in this payment.
An IVA usually lasts for 5 years. At the end of this period, the remaining debt is written off. You will need to pay a set monthly payment towards your IVA for 5 years.
If you own a property which has equity, you may have to remortgage to make an additional payment in the fourth year of the individual voluntary arrangement.
IVA requirements
IVAs are only suitable for people who are insolvent, with unsecured debts of at least £15,000. You also need some form of regular income to be able to meet the cost of the regular payments. Alternatively, you may have a lump sum payment which the Insolvency Practitioner (IP) is able to offer your creditors.
An IVA is arranged by an IP, and can only go ahead if creditors representing 75% of the debt vote in favour of it.
To find out if an IVA is suitable for your circumstances, use our online counselling service, CCCS Debt Remedy. If it is and you decide to go ahead, we can give you advice on IVA fees and the costs involved. CCCSVA, our in-house IVA service, can support you through the process.