Is an IVA right for You?

When overwhelmed with debt, many people feel that bankruptcy is the only option. Instead, it may be possible to enter into an individual voluntary arrangement (IVA) that will allow you to pay your creditors at a rate that is manageable. When you enter into an IVA, your debts are combined into one lump sum and you agree upon a monthly amount that will be paid to a supervisor who oversees the distribution of the money to all of the creditors. The IVA differs from debt management programs in that the IVA normally involves payment in full of all debts. The duration of most IVAs is usually three to five years.

When deciding whether an IVA is appropriate for your situation, there are several factors to consider. If you own your own home and earn more than £15,000 annually, and your level of unsecured debt is higher than £20,000, an IVA may be the solution to your problem. If you are paying more than £300 per month to unsecured creditors such as credit cards, entering into an IVA can help you get your debts back to a manageable level while avoiding bankruptcy.

You will not benefit from an IVA if you do not own a home, if State Benefit is your primary source of income, or if you have less than £200 per month left over after you have paid all of your living expenses. For someone in this situation who has a large amount of debt, bankruptcy may be a viable alternative.

An IVA can help you get your debts back under control, while protecting all of the things that you hold dear. You will be able to settle your debts in full without having to compromise your lifestyle or endure severe hardship.