Is an IVA appropriate for me?
It is an important question to consider and we would always advise you to take the time to look at all other possibilities. There are also a number of criteria you must meet before you take out an IVA. All circumstances are different so to see if an IVA might be appropriate for you complete our Debt Solution Finder below.
Do I Meet the Criteria?
In order to set up an IVA you must:
- Typically have at least £10,000 of unsecured debt. For example from loans, credit cards, store cards, catalogues and/or overdrafts.
- Be in a situation where you’re struggling to meet your monthly repayments.
- Live in England, Wales or Northern Ireland. If you live in Scotland please refer to our information on Trust Deeds.
- Have a licensed Insolvency Practitioner prepare your proposal and present to your creditors such as those employed by Debt Free Direct.
Key benefits of an IVA
- An IVA reduces your debts. The amount you repay depends on personal circumstances and the monthly payments you can afford.
- All interest is frozen and you’re protected from creditor action.
- It prevents bankruptcy, so for people in professions or in offices where going bankrupt will lose you your job an IVA is a great alternative.
- Unlike in bankruptcy, you can protect your assets such as your home and your car.
- It is an agreement that runs for a fixed period (usually for five years).
- You can still open a bank account with an IVA, however, you won’t be allowed an overdraft facility.
Important Considerations:
- Failing to stick to your agreed terms will result in creditors resuming collection actions.
- You will need to have a re-mortgaging assessment. If this isn’t achievable then you may be asked to extend the arrangement by 12 months.
- If you have assets which are not essential to you then you may be asked to make these available to your IVA (e.g. savings plans and ISAs).
- Your credit rating will be affected.
- You are not allowed to borrow or obtain credit during your IVA.
- We won’t take any upfront fees; we will only start taking them when your IVA begins. However, if your IVA fails we can no longer protect you from creditor action and your debt won’t remain frozen. Plus, there is no refund on fees.
“With four growing children my family and I quickly out grew our small home; we moved to a bigger house and took out an interest only mortgage. After a few months things started to go wrong with the house; so we began to rely on our credit cards to pay for our living costs, and then I was made redundant! I had a look online for debt advice and found Debt Free Direct.
“I have now been paying towards my IVA for 3 years and everything is so much better, I now have peace of mind that my finances are under control and I am not letting any of the creditors down as they now receive agreed monthly payments. Debt Free Direct really were absolutely fantastic, understanding and friendly.”
