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Could an IVA be right for me?

Perhaps you've been recommended an IVA, or Individual Voluntary Arrangement, by a friend or a debt adviser?

All sorts of people could qualify for an Individual Voluntary Arrangement and don't even realise it. This debt solution could not only lower your repayments to an affordable level; it could also write off any unsecured debt that you can't afford.

The important questions to ask yourself when you're deciding whether an IVA could be right for you are:

•  Can I afford my unsecured debts anymore?

If your income and expenditure shows that you cannot afford your unsecured debt repayments anymore, then an IVA could be for you.

Find out if you might qualify for an IVA here.

•  Do I need to write off part of my unsecured debts?

If you need a solution to your debt problem that involves writing off part of your unsecured debt, then an IVA could be for you. Just bear in mind that an IVA is a kind of insolvency and it would be recorded on your credit record for six years from the time it starts.

•  If I don't write off part of my debt, can I repay my debts within a reasonable amount of time?

If you have a large amount of unsecured debt, compared with your income, it could take you a very long time to repay it - whereas an IVA usually lasts five years and writes off part of the debt upon successful completion.

•  Am I a homeowner?

An IVA is an alternative to bankruptcy and can help homeowners to avoid having to sell their home, although they may be asked to release equity.

Find out more about IVAs here.

•  Do I have a reasonable amount of disposable income?

Look at your income and expenditure. Ignore what you currently spend on unsecured debts. Look at your essential expenditure instead. Once you have taken care of the essential items in your budget, do you have anything left over? Whatever you do have left over can go towards your unsecured debts. It needs to be a reasonable amount, probably in the region of £200 or more, for an IVA to be a realistic option.

•  Can I commit to five years of repayments?

An IVA tends to last for five years, so consider whether you will have a regular income for the next five years.

These are a few of the things to consider when deciding whether an Individual Voluntary Arrangement could be right for you.

Click here to apply for an IVA here.

By Lucy Bower.

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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.