If you are struggling with your finances and have unsecured debts of £15,000 or more, an IVA might be the appropriate debt solution for you.
IVAs and dealing with debt
An IVA, or individual voluntary arrangement, allows you to make affordable monthly payments towards your total debt over a set period of usually 5 years. Sometimes a lump sum can also be accepted along with smaller monthly repayments.
If you are a homeowner and have equity in your property, your situation is reviewed in year 4 and you may also be asked to free up a lump sum as part of the arrangement.
At the end of the repayment period, the remaining debt is written off.
An individual voluntary arrangement is set up by an Insolvency Practitioner (IP) who draws up a proposal and sends it to your creditors. If creditors representing at least 75% of your total debts agree to the plan, the IVA goes ahead.
As long as you stick to the terms of the IVA and keep up with payments, you are protected against legal action to recover the debt. Once a year, your IP carries out a review of your finances and a progress report is sent to you and your creditors. You will also be notified when the IVA is over.
IVAs and solving your debt
If you need more information about IVA debt solutions, you can get free, impartial advice from us. Our online service CCCS Debt Remedy can recommend the best debt solution for your situation and tell you if an IVA is suitable for your circumstances.