IVA FAQ / Guides
What is an IVA?
An Individual Voluntary Arrangement is a formal and legally binding agreement between you
and your creditors. It provides both parties with certain legal protections whilst you
solve your debt problems.
Once the agreement is in place your creditors must stop all further interest and charges
on your debts. All letters and phone calls from your creditors in relation to your
debts should then cease. Once the 60 months have ended, and you have kept to the
arrangement any outstanding debt included in the IVA is written off.
Homeowners may be required to re-mortgage after 4 years. Alternative solutions
may be offered.
What are the minimum criteria for an IVA?
- Two or more creditors.
- 3 separate credit agreements.
- Struggling with payments.
- More than £15,000 of unsecured debt
- Proof of income.
- UK citizen (IVA specific for England and Wales or NI).
- Client needs to be insolvent.
Pro's of an IVA
- 5 year plan to be debt fee (unless the client has equity).
- No further interested or charges added to the debt.
- Client is fully protected from creditors.
- No further legal action.
Con’s of an IVA
- If the client is a homeowner the creditors could ask for equity
release in either year 1 or year 4 of the IVA.
- Credit rating is effected for up to 72 months after the Iva has been completed.
- An IVA is a formal agreement if you miss payments you could be made bankrupt.