All about IVAs
Who qualifies for an IVA?
You'd only qualify for an IVA if you are completely unable to repay your unsecured debts (e.g. personal loans, credit cards and overdrafts) in a reasonable time.
You'd also need to be able to make a reasonable monthly payment towards your debts.
However, your IVA must be approved by lenders who account for at least 75% of your total unsecured debt before it can go ahead. If this happens, all your unsecured lenders will be included - even the ones who did not vote in favour.
But there are more ways to tackle debt than just with IVAs!
Is an IVA right for me?
Firstly, please tell us a few details about your situation:
What debts could I include in an IVA?
An IVA can help you repay your unsecured / non-priority debts such as:
- Credit card / store card debts
- Catalogue debts
- Unsecured loans
- Overdrafts
- Credit agreements
These types of debt are all considered 'non-priority' because, although they're still important, falling behind on them won't have the same potential consequences as any unpaid 'priority' debts - such as a secured loan or mortgage - which could result in legal action being taken against you and your home being repossessed.
However, falling behind on your unsecured debts could still lead to a damaged credit rating, extra fees & charges and other financial problems - and the longer you leave the problem, the more risk you could face of being made bankrupt.
This is why finding a suitable approach, such as an IVA, sooner rather than later is important.
What debts couldn't I include in an IVA?
Your IVA won't directly cover 'priority' debts like:
- Mortgage / rent
- Secured loans
- Student loans
However, it would help to make those things more affordable, because your payments into your IVA are based on what you can afford after you've covered those costs, along with all your other basic living costs (food, utilities, transport, etc.) That means the money you should be using for your essential costs won't be going towards your IVA payments instead - giving you peace of mind that all your costs are safely covered from month to month.
If you're having difficulty keeping on top of any secured debts you have, you should speak to your secured lenders as soon as possible to find out the best way of getting on top of them again.
What if I don't qualify for an IVA?
So an IVA won't be an option unless you have quite a lot of unsecured debt that you can't afford to repay as agreed - but you are able to make reasonable contributions towards it for at least five years.
An IVA isn't always the answer to debt problems. If it isn't the best way for you to tackle your debts, our advisers can help you explore your options - and help you find an affordable, realistic way to get back in control of your debts again.
Remember that all debt solutions that reduce your monthly payments will affect your credit rating for six years - but if you delay getting help the overall consequences could be even more serious.
No matter how much debt you're in, we have a debt solution that could help. If you think an IVA could be suitable for you, you can find more information about IVAs here.
Fill in the form above to see if you could qualify for an IVA.
It's good to know:
- We negotiate with the UK's major lenders and retailers
- We pride ourselves on our approach to great customer service
- Each month 1000s of people are benefiting from our help
To find other sources of free advice visit Money Helper. It's here to listen and give free, impartial, trusted guidance. Based around you and backed by government.
Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.