If you are looking for a way to be debt free then you might be interested to know that there is legislation which can help you become debt free in as little as 60 months. This is known as an Individual Voluntary Arrangement (IVA) and is designed to offer a more practical alternative to bankruptcy.
IVAs form part of the Insolvency Act of 1986, and is intended as a form of legal help for those who have high levels of debt and can no longer afford to make repayments to their unsecured creditors andt wish to avoid bankruptcy.
If you are suitable for an IVA then it is often the most ideal debt solution for your circumstances. This is because it offers you the chance to make realistic payments to pay back some of your debt, but you only pay what you can afford. Your monthly payments are based on your financial circumstances and any remaining debt is legally written off on successful completion of the IVA.
Your IVA proposal will be put together by a licensed Insolvency Practitioner (I.P). They will negotiate with your creditors to reduce the amount of debt that needs to be repaid. An IVA is only accepted when 75% of creditors (in terms of debt value) agree to the proposal.
If you find that you are struggling with overwhelming levels of unsecured debt and do not want to file for bankruptcy, then an IVA can offer you a realistic alternative. This debt solution helps you to write off a proportion of your unaffordable debt. You make reduced payments to your creditors for set period and any unpaid debt is automatically written off, typically leaving you debt free in 60 months!
IVAs are a complex legal procedure, you need to ensure you seek IVA advice to see if you fit the IVA criteria and then we can begin the IVA process.
Not everyone qualifies for an IVA, and the basic IVA criteria are as follows:
- Unsecured debt over £10,000.
- 3 or more creditors.
- You can afford to make monthly payments of at least £200.
If your debt is under £15,000 then you might want to consider our debt management plans which are an informal alternative to an IVA. With a debt management plan, we can negotiate a lower monthly payment to your debt but no amount of your debt can be written off. However, creditors are sometimes willing to freeze any additional interest or charges.
An IVA is a formal agreement between you and your unsecured creditors, and we will help you come to an affordable monthly payment which you can realistically afford. You commit to making this payment for an average of 60 months then any remaining debt is written off.
There are many benefits of an IVA, including:
- Unaffordable debt will be written off.
- One monthly payment, no matter how many creditors.
- Only pay what you can afford.
- Assets are protected.
- Protected from further legal action by your creditors.
- Your creditors are bound by the term of the IVA.
- Avoid stigma of bankruptcy.
- Easier to manage your secured debt as you have reduced your outgoings.