Want to know how an IVA can help you?

Last updated: 29th August 2013

An IVA can help you to resolve your unsecured debt without having to declare bankruptcy. All you need to have is a regular household income and live in England, Wales or Northern Ireland.

All your unsecured debts will be consolidated into one, affordable monthly payment which can start from as low as £100 a month. This allows you to organise and take control of your finances by writing off the unaffordable debt and freezing interest. This has been a popular alternative to bankruptcy since the mid-1980s.

The typical duration of an IVA is five years. In this time, you can start to make ends meet again and manage your money, knowing you are making a single affordable payment.

Perhaps most importantly, you won’t be required to sell your home against your wishes. You will need to undergo an assessment for a re-mortgage but you won’t be pressured into a sale if you don’t want to, although other assets which are not deemed as essential may be used towards payments. This might include things like savings and ISAs.

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What is an IVA?

Watch our video to learn more about what an IVA is. Get all the key information about an IVA, including the criteria, how it can help you and it’s many advantages as well as other things to be aware of.

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Additional Benefits of an IVA

As well as the main benefits of taking out an IVA, other advantages involved in an IVA include:

  • At Debt Free Direct, we don’t take two months of fees up front. This is because IVA fees come out of the payments you make to us.
  • An agreement that means once your creditors agree to it they can’t change their minds so long as you stick to the terms.
  • You can still open a bank account but you won’t be allowed an overdraft.
  • You won’t have to sell your property if you don’t want to.
  • Flexibility to ensure that you can keep up with your payments. If ever you are struggling you just need to speak to us and sometimes we can agree to a new payment amount. Your creditors may also need to agree to this.

Important Things To Consider

  • To make an informed decision we advise that you consider how an IVA may impact you.
  • You might be required to re-mortgage your home towards the end of your plan if you have equity in your property.
  • It will stay on your credit history even once the IVA is closed.
  • Whilst five years is the typical duration of an IVA, it could extend to six years, depending on circumstances.
  • You are not allowed to borrow during your IVA.
  • Your credit rating will be impacted.
  • If the IVA fails we can no longer protect you from creditor action, nor can we keep the debt frozen; it will start to grow again. Secondly, there will be no refunds on fees.
  • Details of your IVA are listed on the Insolvency Service website, which is available to the general public.