IVA stands for Individual Voluntary Arrangement. It is a legal and government approved method of resolving debt.
If you are struggling to make your current debt repayments you could be eligible for this scheme.
By showing that your monthly living costs and debt repayments are more than your monthly income we will show that you cannot afford to pay your debts. This is where an IVA can help as you will repay only what you can afford without using money you need for essentials, like your mortgage/rent payments, food and utility bills and other monthly costs.
How is an IVA payment calculated?
The amount that you pay is easy to calculate. There are allowable expenses (living costs) like mortgage payments, housekeeping, insurances, mobile/telephone, Sky TV, Car Insurance. Basically, anything you need in order to live is taken into consideration when calculating your payment. This means you will be paying a figure that you can affordto pay instead of a payment that the creditors demand from you.
IVA Payment = Income minus Living Costs
Once you work out your payment it is easy to see if your creditors will accept this or not. See diagram below to see an example of how an IVA is affordable.
How popular are IVAs?
Over 3,500 people enter an IVA every month to resolve their debts. Creditors (lenders) also like IVAs as it means they will get paid an agreed amount over an agreed period of time.
Do you qualify?
If you struggling with your repayments and owe over £15,000 to two or more creditors then you may be eligible for an IVA. Call us to see if your creditors will accept an IVA.
Will your IVA be accepted by your lenders?
To get an IVA agreed some (but not all) of your creditors have to accept your proposal. Because of our experience over the years we know what creditors are prepared to accept. We will be able to tell you if your creditors would accept an IVA proposal from you.
Do Debts Get Written Off
In short, Yes.
An IVA is structured so that you pay only what you can afford, not what you creditors ask you to pay. You will make this payment for a fixed period of time (generally 5 years). After making the agreed payments it is likely that some of the original debt will remain unpaid. At this stage the creditors are legally obliged to write off these remaining debts.
We usually find between 60-70% of our client’s debt is written off. It depends completely on what you can afford and what your total debt balance is.