Could I have an IVA if I am retired?

Retired people can start and complete successful IVAs just like younger people, but whether or not it's the right approach while you're retired really depends on your income and whether a five-year repayment plan would be sustainable on your income.

An IVA usually lasts five years, and you must repay as much of your unsecured debt as you can during that time - and possibly release equity as well. So, you'd need a reliable source of income during that time, and a state pension is unlikely to be enough. However, if you receive a private pension or other income, such as rental income, you might be able to afford reasonable repayments every month.

If you were due to retire while your IVA was in progress, your income would change and it's very likely this would affect how much you could afford to pay each month. This is something your Insolvency Practitioner would look at while deciding whether an IVA would be suitable for you.

Find out if you might qualify for an IVA.

Consider how you will pay for things after you retire

Homeowners are often asked to release equity during an IVA, and the money raised goes towards repaying their unsecured debts. However, doing that will increase the size of your mortgage, so you and your IP would need to consider whether this would be realistic before you decide on which approach to take to your debts.

IVAs also stay on your credit record for six years from the day you start one. People who have been in an IVA can find that their credit score makes it more difficult to find affordable credit for six years.

However, an IVA could protect you from legal action from your unsecured lenders, reduce your monthly payments and write off part of your debt upon successful completion. Talk to one of our advisers and find out how we could help you.

Freeman Jones specialise in Individual Voluntary Arrangements. We can help people struggling with debt to get back on their feet.

Apply for IVA help here.

By Lucy Bower.