manage your debt with an IVA

Fees for an IVA are inevitable, although they can differ significantly among different service providers. Certain companies may only charge fees if your IVA is approved by your creditors. These fees are typically deducted from your regular, manageable IVA payments rather than being added on separately.

An individual voluntary arrangement (IVA) is a formal agreement that you and your creditors must stick to, legally. If you don’t keep up with the payments as agreed, your IVA could fail, leaving you still responsible for your debts. In that case, your creditors could take action against you to recover what you owe. But don’t worry, we’ll only recommend an IVA if it’s the best choice for you based on your situation.

Yes, an IVA is a legally binding agreement between you and your creditors. This means it’s approved by the court, and both you and your creditors must stick to it or there could be serious consequences.

There’s no restriction on taking a holiday while you’re in an individual voluntary arrangement. You’re free to spend your money as you wish, provided you prioritise covering your living expenses and IVA payments first.

Your IVA will remain on your credit file for six years starting from the day it was agreed upon. Once this period ends, you essentially have to rebuild your credit rating from scratch. While this may take some time, there are actions you can take to expedite the process.

One strategy is to apply for small amounts of credit from specialised lending companies catering to individuals aiming to rebuild their credit score. By managing this responsibly — ensuring you repay your borrowing each month — you demonstrate to other potential lenders that you’re a low-risk customer, thereby enhancing your credit rating.

Additionally, you can enhance your credit rating by ensuring you’re registered on the electoral roll and regularly checking your credit file to confirm that all information is accurate.

IVAs are more likely to get the green light when you’re paying as much as you reasonably can without putting yourself in financial distress. Your proposal will make this clear by detailing your income and expenses. Including all your creditors also improves the chances of acceptance, ensuring fairness for everyone involved.

Rest assured, the qualified IVA experts we work with will only present your proposal to creditors if they believe it has a good chance of being accepted. Ultimately, it’s up to your creditors to decide by voting on the proposal. For it to be approved, creditors representing over 75% of your debts need to vote ‘yes’.

Owning a home and having a mortgage doesn’t prevent you from pursuing an IVA. If there is more than £5,000 of equity in your home, you’ll usually have to remortgage to release money to be paid into your IVA. Equity is how much money you’d make from selling your home once any mortgages were paid off. If you’re unable to remortgage, you’ll carry on making your IVA payments for up to another 12 months. This means your individual voluntary arrangement will last up to six years instead of five.