Debt problems – what are the advantages of an IVA?

Debt problems may be growing but through such as a Debt Relief Order, a debt consolidation loan, bankruptcy or an IVA, debt help is available. As part of our series of articles on debt problems we now review the advantages of an IVA.

Debt problems - what are the advantages of an IVA?An IVA (Individual Voluntary Agreement) is a formal agreement between you and your creditors under which you pay an agreed amount each month towards the total debt you have with them.

An IVA is an alternative debt solution to bankruptcy.

In order to apply for an IVA you must have at least £15,000 of debt, owed to at least 3 creditors.

If you have less than £15,000 of debt, few assets and a disposable income of less than £50 per month, a Debt Relief Order may be more appropriate for you.

What are the advantages of an IVA?

  • Up to 75% of your debt can be written off in an IVA. You can get help from an IVA specialist to calculate what you can afford.
  • The IVA approved amount is legally binding
  • The agreed term for an IVA is usually 5 years and once completed you are debt free
  • Unlike bankruptcy, an IVA is not advertised so unless you tell them your friends and family will not know about it
  • You don’t have to let your employers know and unlike with bankruptcy you can continue to work in such as the armed forces and selected professions, such as an accountant or solicitor
  • You can continue to be a director of a limited company
  • You can open a bank current account (although you cannot have an overdraft facility)
  • An IVA can help repair your credit rating

There are some disadvantages of an IVA, which we’ll cover in another article, but clearly there are many advantages to consider.

If you want to discuss an IVA further, or got other debt advice, simply complete our Debt Advice form and an IVA specialist will be pleased to help.

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