All about IVAs
All about IVAs
An IVA is designed to help you clear all the unsecured debts you can't afford – such as personal loans, credit and store card debts – without resorting to bankruptcy.
Backed by legislation, an IVA can only be set up by a licensed Insolvency Practitioner (IP). If your proposal is accepted, your creditors will freeze interest and charges and write off any remaining unsecured debt when your IVA is completed.
An IVA normally lasts for five years, during which time you will make an agreed monthly payment towards your debt. Providing you stick to the terms, you'll have settled those debts at the end of your arrangement.
Example case of an IVA
IVA repayment is based on affordability and varies from case to case. Homeowners may have to release equity towards the end of the agreement.
How long does an IVA last?
Some debt solutions last as long as they need to - as long as it takes to repay everything you owe.
An IVA isn't like that. You and your lenders will agree on the length of your IVA before it even starts. In most cases, it'll last for five years.
As long as you've repaid what you said you would in that time, that'll be it - your remaining debt will be written off and you'll be officially debt-free.
The difference between IVAs & bankruptcy
IVAs offer some serious advantages over bankruptcy, but bankruptcy is sometimes the better choice - it depends which is right for you.
To find out more about the differences between IVAs and bankruptcy, click here.
I'm a homeowner - would I lose my home?
It's extremely unlikely - you might have to release some equity from your home if you're a homeowner, so you can pay more in to your IVA, but you'd be very unlikely to have to sell your home.
In fact, your IVA should make it easier for you to stay on top of your mortgage and avoid falling into arrears, since your IVA payments would be calculated to leave you with enough to cover your mortgage payment (and other essentials) every month.
If you entered bankruptcy, on the other hand, you'd have to release any equity over £1,000 - and you might be forced to sell your home.
If you're worried about the impact of an IVA in any way, please get in touch and we can answer all your questions.
On a Freeman Jones IVA, you have your own dedicated Relationship Manager (and their direct telephone number) so you can talk to someone you know and trust when you need advice.
It's good to know:
- We have an excellent relationship with the UK's major lenders and creditors
- We pride ourselves on our approach to great customer service
- Each month 1000s of people are benefiting from our help
