Qualifying for an IVA
IVAs are available to those struggling to repay debts of £15,000 or more. The criteria for qualifying for an IVA are quite specific and depend on your individual circumstances. The following criteria is used as a guide, therefore we suggest you call us on 0800 096 1331 for a free initial consultation to make sure this is the best solution for you.
IVA benefits
| Affordable repayments: | Repayments are tailored to your current financial circumstances to ensure they are as affordable as possible. |
| Debts written off: | Remaining unsecured debts will be written off at the end of the IVA term. This only applies to the unsecured debts included in the arrangement. |
| Protection: | An IVA protects you from creditors taking court action for full settlement of outstanding debts. |
| Formal agreement: | Once agreed creditors are required to freeze all interest and charges† and cannot apply changes to IVA repayments. |
| Creditor letters: | Reduce worrying creditor letters and phone calls. |
| Fixed term agreement | The agreement is fixed for a period of 60 months. On successful completion of the IVA, you will be free of the unsecured debts included in the arrangement*. |
IVA: what you need to know
| Legally binding: | Failure to keep to the terms and conditions of the Individual Voluntary Arrangement could lead to repercussions including Bankruptcy. |
| Lending: | Once the IVA begins, you will not be allowed to take out further credit agreements including loans and credit cards. |
| Property: | If you are a homeowner, you may be asked to release equity in the final year of the IVA to repay creditors. This depends on your personal circumstances. |
| Credit rating: | Your credit rating will be affected for 6 years following the completion of an IVA. |
| Debts: | Only unsecured debts can be included on an IVA. This means debts not secured against a property or asset. |
What are unsecured debts?
An unsecured debt means a debt which is not secured against a property or asset. The lists below are examples of the types of debts included and excluded from IVAs.
Debts that can be included in an IVA:
- Personal loan
- Store card
- Credit card
- Bank overdraft
- Catalogue account
Debts excluded from an IVA:
- Mortgage
- Hire purchase loans (car loans)
- Secured loans
- Council tax
- Water rates / gas / electricity bills
- TV license
- Student loan
Is an IVA right for you?
At Baines & Ernst, our experienced advisors will ensure you know exactly what an IVA entails before you enter an arrangement. If an IVA isn’t right for you, we specialise in a number of debt management solutions that could help you overcome your debt problems.
For an overview of the range of debt solutions available to you, you can view a free publication from the Insolvency Service called ‘In Debt? Dealing With Your Creditors’, here.
For IVA advice, call us on 0800 096 1331.
*Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt. Your credit rating will be affected for up to 72 months. Failure to adhere to an IVA may result in bankruptcy. †For an IVA to be approved and interest and charges to be frozen it needs to be accepted by 75% of the creditors (by value)
Baines and Ernst Ltd