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IVAs or Individual Voluntary Arrangements

An IVA is a government backed solution to help get rid of your debt problems. An IVA is a legal agreement which works as an alternative to bankruptcy. You pay an agreed sum each month and can be debt free in five years. Once the agreement is in place your creditors must stop all further interest and charges on your debts. All letters and phone calls from your creditors in relation to your debts should then cease. Once the 60 months have ended, and you have kept to the arrangement any outstanding debt is written off.

Learn more about the Advantages of IVAs now.

Alternative to IVAs: Debt Management Plans

Debt Management Plans are not legally binding. Although they may greatly reduce your repayments each month, you will still have to pay all of your debt back. This could take a very long time unlike an IVA where you agree to only pay a percentage of the total debt back usually over 60 months. Example: A debt of £20,000 with reduced monthly repayments of £200 a month will leave you repaying your debt for at least 9 years. Your creditors do not have to stop adding interest and late payment charges. Some may for a short period (perhaps 6 months) after which creditors may want to review the situation. This means that the reduced amount paid each month may only just cover the extra interest being added. If this is the case, then the debt will never be repaid. Your creditors can break the agreement at any time and asked for increased payments or add further interest. Not knowing where you stand with creditors, may have you always waiting for that next payment demand letter to come through the post.

IVAs are legal agreements which set the amount you can manageably repay every month and prevent creditors from taking any further action, as long as you keep to the agreement.

Check out IVA Rules to learn more and see if you can qualify.