If you have a significant amount of unsecured debt, and you don’t think you’ll be able to pay it back in a reasonable time, it’s important to find an approach that will let you repay as much of your debts as possible at a realistic, affordable pace.
One potential option is an Individual Voluntary Arrangement, more commonly known as an IVA. It’s an insolvency solution open to residents of England, Wales and Northern Ireland, designed to lower the borrower’s repayments, protect them from any further legal action from their lenders, and, on successful completion (in most cases, after five years), write off any remaining included debts.
Read on for more information about what precisely an IVA is and how it works.
You might decide an IVA is the right option for you if you simply can’t afford to repay your unsecured debts, but don’t want to go bankrupt.
Once an IVA is agreed, you could:
If you think an Individual Voluntary Arrangement sounds like it could be suitable for you, you could apply for an IVA here.
You should bear in mind, however, that an IVA will affect your credit rating for six years (which could make getting more credit during this time difficult). Also, if you’re a homeowner, it’s likely you’ll have to release some of the equity in your home.
An IVA can only be set up by a qualified Insolvency Practitioner (IP). If an IVA is considered the best solution for you, an IP can draw up an IVA proposal with you, showing how much you can reasonably afford to repay each month.
Your proposal will then be sent to your unsecured lenders, who’ll vote on whether or not to accept your IVA. If lenders representing 75% or more of the total debt value agree, your Individual Voluntary Arrangement will go ahead.
