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Will an IVA freeze interest on my debts?

An IVA (Individual Voluntary Arrangement) can make your unsecured debts easier to manage in a number of ways - if you're eligible.

For one, once it's been approved, it will freeze interest and charges on your debts - though only the ones actually included in your IVA.

How else can an IVA help?

Along with freezing interest and charges, there are a number of other advantages. You'll get legal protection against your unsecured lenders, so they won't be able to ask you for higher payments, take you to court or petition for your bankruptcy - as long as you keep to your agreed payments.

You'll also be able to make lower, more affordable monthly payments (again, as long as enough of your lenders agree to the proposed terms of your IVA). These new payments will be tailored to fit around your existing priority payments - like your mortgage or rent - so that you won't have to pay more than you can realistically afford.

A qualified Insolvency Practitioner will help you work out how much you can afford, and they will guide you through the rest of the process.

And, unlike bankruptcy, you'll be able to keep your home, as long as you keep up with your mortgage payments. You may, however, be required to release some equity in it during the final year of your IVA.

If you'd like to know more about IVAs, click here to read a guide.

Can anyone get an IVA?

An IVA isn't the best debt solution for everyone. It's a serious and legally binding approach to take - and it will damage your credit rating for six years from the date it starts.

On top of this, enough of your lenders would have to accept your IVA before it can go ahead - and they won't do that to if they think that there's an better way for you to settle your debts. You are only eligible for an IVA if you're really struggling with your debts and you doubt you'll be able to clear them in a realistic amount of time, but you can commit to regular payments throughout your IVA.

If you'd like to find out if you're eligible for an IVA, you can speak to one of our expert advisers by clicking here.

By Matthew Plant.

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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.