We commonly get asked “Do IVAs work?”, and quite simply the answer to this question depends on your personal situation and how much debt you have accumulated. To know if an IVA will work for you, you need to find out how much debt you owe.
Here at Money Fixers we understand that it can sometimes be hard to keep track of debts totals and how much money you owe each creditor. We are frequently asked “how much debt do I have?”. Finding out how much debt you owe is the first step to dealing with your debt problems. This means totalling all your debts; from credit cards to council tax arrears, or any other debts you may have.
Something that may help you calculate your total debt, and work out which creditors are owed what amount, is your credit file. You can obtain a copy of your credit report from agencies such as Experian, however you should be aware that although most companies report their accounts to credit reference agencies it is not a legal requirement. Therefore, this means that you may have additional debts to those that appear on your credit reports.
You can contact us if you need help finding out what you owe or any guidance on managing your debt. Our expert advisors will happily give you advice regarding your personal financial circumstances and suggest the best solution for you.
After calculating your total amount of debt, the next step may be deciding which debt solution is best for your financial situation. You should consider things like which of your debts can potentially be written off and how you can improve your credit score.
One option you may want to consider is an IVA. You may be wondering if IVAs work as a debt solution or how an active IVA works… let us investigate this for you.
An IVA is a formal debt solution which is a legally binding agreement with your unsecured creditors, formulated from what you can comfortably afford to pay back each month. Usually, once the IVA term is complete any outstanding unsecured debt to creditors is written off.
Whether or not an IVA works for you fundamentally depends on your personal financial situation. A good indication of whether an IVA is best suited to you is if you have a stable income, you have unsecured debts totaling £6,000 or more (or sometimes less), and if an IVA provides a better return than bankruptcy for your creditors.
Additional qualifying criteria may also apply alongside this list, you can find out whether you're eligible by applying below.
The first step of the IVA process is to create an IVA proposal to present to your creditors. This has to be put forward by a qualified Insolvency Practitioner, who will work with you to devise an appropriate proposal to your personal situation. The proposal will be based on an amount that you can comfortably afford to pay each month over a set period. In most cases creditors will usually approve an IVA and agree to any reasonable terms it puts in place. Once the IVA is agreed, you will be able to repay your unsecured debts in one reduced monthly payment and be legally protected from demands for payment from any creditors.
If you are considering an IVA as a debt solution, you can receive a call from one of our expert advisors by filling out our quick online application form.