Knowing whether an Individual Voluntary Arrangement, or IVA, is right for your circumstances can be difficult – there’s a lot of confusion about IVAs which can make it hard to know if it’s a useful debt solution. We’re here to answer the question of whether an IVA is good, and what to consider before applying for one.
IVAs are a solution to help you get back in control of your debts. It’s a formal agreement between you and your creditors, stating that you will pay back your unsecured debts at a lower rate over a set period. Once you reach the end of the IVA term, providing all the payments have been made, the remaining debt is written off.
The benefit of an IVA is that it helps you reduce your debt in a manageable way, because you’ll know exactly how much you need to pay each month. You’ll work with experienced insolvency practitioners who will act as a negotiator between you and your creditors to design a plan that suits all parties.
With your remaining debt written off at the end, it can be a weight lifted off your shoulders and will give you a fresh financial start once the IVA has come to an end. You’ll also have legal protection over your lower repayments since it’s a legally binding contract between you and the creditors.
Like any debt solution, an IVA will impact your credit history which can make it harder or more expensive to get credit in the future. However, having debt on your credit report will also negatively impact you, especially if you’ve defaulted on your repayments in the past.
IVAs aren’t suitable for secured debts but affording these should be easier since you’ll have lower repayments on your unsecured debts. While an IVA doesn’t require you to sell your property, you will have to release some equity. If you can’t remortgage, your IVA will typically be extended so you can pay more towards it.
IVAs do come with their own considerations, as any debt solution will, but they’re typically a beneficial option for people struggling to make repayments on their unsecured debts. With a legally binding solution that ensures you can regularly make lower repayments without consequences, most people in this situation find that they have less anxiety and stress around their debts, and they can enjoy a fresh start once the IVA comes to an end.
Speak to a qualified professional by contacting Frost Group to ensure you’re eligible for an IVA and that it suits your circumstances.
At Frost Group, we want to make things as easy as possible for you. That is why, if you can’t come to us, we’ll come to you. We operate face to face, nationwide meetings, wherever is most convenient for you.