What Is An IVA?

IVA stands for Individual Voluntary Arrangement. It is an arrangement that an insolvent person has agreed to enter into between him/her and the organisations they owe money to. The arrangement results in reduced payments in order to pay off part of the money owed and usually, after 5 years, the remainder of the debt can be written off.

In order to enter into an IVA a person has to be classed as insolvent, which means they are unable to pay debts due to having more liabilities than assets. Normally a person will have to be classed as having a significant debt problem (debts over £15,000). From being insolvent a person needs to take action. This could be to consolidate debt, enter into a debt management program arrange an IVA (individual voluntary agreement), or become bankrupt.

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During the 5 years that debt repayments are made to an IVA, all interest charges are frozen and no correspondence is received from the creditors. You normally deal only with the company involved in setting up the IVA, which has to be a licensed professional Credit Repair UK arrange this through one of our strategic partners.

If you own your own home you may have to release equity by remortgaging or taking out a secured loan on the property this is usually in or at the end of the 4th year.

An IVA is an agreement between you and your creditors that is legally binding and gives you the opportunity to protect important assets, such as your home the IVA is set up with an agreement through the courts.

An IVA is different to bankruptcy and is designed to avoid some of the stigma and issues that surround bankruptcy. However, an IVA should not be seen as an easy option.

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IVA Advantages

An Individual Voluntary Arrangement brings a significant number of advantages over other debt consolidation solutions and bankruptcy. These include:

	One low payment covering all of your unsecured credit.
	Able to write of a significant portion of the debt.
	Payments calculated on what you can afford based on income and expenses.
	Interest and charges frozen for the life of the IVA.
	Your debt will not rise during the IVA.
	An IVA helps safeguard against losing your property and other assets.
	An IVA is legally binding so your creditors can not change the terms.
	Your creditors can not contact you during the IVA.
	There are no hidden fees with an IVA.
	Unlike Bankruptcy an IVA is not advertised.
	An IVA can last from just 6mths to 5 years.
	You can continue in business and even act as a company director whilst in an IVA.

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IVA Disadvantages

There are some disadvantages of reducing your debt through an Individual Voluntary Arrangement (IVA). These include:

	You must have a minimum of £15,000 unsecured debt.
	You must have suitable income and full time employment.
	You are not protected from bankruptcy if you fail to make payments.
	If your IVA fails in running you can be made bankrupt and the cost of the IVA will be added to your debt.
	The gain acceptance creditors representing 75% of your debt must vote in favour of the proposal.
	IVA's are recorded in the public register and could affect your ability to borrow in future.
	If you suddenly come into money you must declare this and pay the money into your IVA.
	If you work extra hours to earn more money you may have to pay a portion of this into your IVA.
	You are required not to obtain extra credit during the term of the IVA.

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Credit Repair UK

Credit Repair UK will arrange an IVA (Individual Voluntary Arrangement) on your behalf through our IVA partners. They will work with both yourself (the debtor) and the creditors (companies/organisations to whom you owe money) to come to a suitable arrangement.