Individual Voluntary Arrangement (IVA)
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An Individual Voluntary Arrangement is a debt solution that can make debt repayments affordable over five or six years.
An Individually Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditor(s), which must be set up by an insolvency practitioner (IP). The IP will propose an affordable repayment plan to your creditors lasting five or six years.
The IVA is approved when 75% of creditors accept the agreement. Any unsecured debt that is still outstanding when the repayment term ends will be written off. However, if you have a home or mortgage you may be asked to borrow more to repay the outstanding balance to finalise the IVA.
The pros
- Repayments are based on your finances and what you can afford without experiencing difficulty
- You’ll be allowed to keep your home, but you will need to keep to your ongoing mortgage payments
- You aren’t required to pay IVA set-up fees
- Ongoing monthly fees are included in your single monthly payment – not added extra
- Unsecured debts that have not been fully repaid at the end of the IVA are written off
The cons
- At the end of the agreement, homeowners may need to remortgage or take out a secured home loan to pay the shortfall
- Failing to keep to an IVA can lead to bankruptcy
- Using an IVA negatively affects your credit file
- Your IVA proposal can be rejected
- Personal spending is restricted during an IVA, and annual reviews of your finances will ensure you are paying what you can
More information on Individual Voluntary Arrangements
Individual Voluntary Arrangements (IVAs) are a serious formal debt solution. They should not be entered into without professional advice and the full implications of using an IVA should be understood, especially if you own a property or have a mortgage. MoneyNerd offers a selection of free guides to discuss the finer details of IVAs. Check out our IVA posts to learn about IVAs.
- Can I do an IVA myself? 2022 Guide
- What are the Negatives of an IVA? 2022 Guide
- Will an IVA Affect My Partner? 2022 Guide
- Does an IVA Affect Renting a Property? What You Can Do
- How Long Does an IVA Last? Scenario Analysis
- IVA Debt Plan – What You Need To Know & FAQs
- IVA Pros and Cons – Complete Analysis & FAQs
- IVA Examples – Complete Analysis 2022
- How Long Does an IVA Last on Your Credit Report? Answer
- How Will an IVA Affect Me in The Future? Quick Answer
- IVA Spending Restrictions – Living Expenses Guide
- What Happens if I Stop Paying My IVA? Missing Payments
- Debt Relief Order vs IVA – Detailed Comparison & Analysis
- Self-Employed IVA – All You Need to Know, FAQs & Tips
- Joint IVA – Complete Guide and Analysis 2022
- IVA or Bankruptcy? Comparisons, Analysis & FAQs
- IVA Reviews – Complete Guide 2022
- Is an IVA Worth it? A Complete A-Z Guide [Upd. 2020]
- IVA Guide 2022
- IVA Online – Complete Overview, Tips, FAQs & More
- IVA Application Form – What To Expect in 2022
- Scottish IVA Register – Complete guide, FAQs & More
- IVA Northern Ireland – Everything You Need to Know
- IVA Scotland – All You Need to Know, FAQs & More
- IVA Certificate – What You Need To Know
- Why Would a Creditor Refuse an IVA? Main Reasons 2022
- IVA Rules – Complete Overview & FAQs
- IVA Fees 2022 Complete Analysis
- What are the Requirements for an IVA? Protocols & Docs