Is An IVA Right For Me? | Everything You Need To Know

Every year, thousands of people decide an IVA is right for them. Standing for individual voluntary arrangement, this solution is a popular form of insolvency designed to help you get on top of your debts.

However, just because these people chose an IVA doesn’t mean you automatically should. Similar to other debt solutions, an IVA has a variety of advantages and disadvantages. Here’s how to tell whether this option is the right one for you:

Do I qualify for an IVA?

First though, let’s determine if you’re eligible for an IVA. Although the qualifying criteria can differ between insolvency practitioners, you should broadly fulfil the following:
  • You owe your creditors more than £6,000.
  • You have more than one lender.
  • You have a reliable stream of income available to make monthly repayments.

When is an IVA a good idea?

Fulfilling the acceptance criteria is a good indicator that an IVA may be right for you. However, before you start your application, it’s important to understand that an IVA is also a commitment. Here’s how to know if this debt solution could be the best option for you:

You’re able to make monthly repayments

Once your IVA is approved, you’ll need to make monthly payments towards it. The good news is, during the application stage, you’ll work with a qualified professional (called an insolvency practitioner) to work out how much you can afford to pay.

This means these payments should be affordable and will reflect your current financial situation. Before signing the IVA, you will know – and agree to – exactly how much you need to pay each month.

It’s important that you keep making these payments or else your IVA could fail. Therefore, you should have a reliable and sustainable source of income available. Usually, possessing a secure job is the best way to ensure this.

You’re able to keep up payments for at least five years

An IVA usually lasts between five to six years so this is longer than some debt solutions out there. However, there are few quick options to resolving debt. Considering an IVA allows you to protect your assets and write off debt upon completion, many consider the wait worth it.

You’re unable to repay your creditors

Given an IVA is a form of insolvency, you should currently be in a position where you cannot afford to pay off your creditors in a realistic amount of time.

You don’t want direct contact with your lenders

If you’ve received demands for repayment or been threatened with legal action due to your debts, we know just how stressful that can be. Fortunately, an IVA stops all direct contact with creditors and should pause any action to reclaim debt – such as bailiff visits.

As a result, an IVA is frequently seen as a way to grant peace of mind.

Ultimately, you want to write off your debt

Upon completion of an IVA, you’ll write off any remaining unpaid debt. Although the actual amount differs on a case-by-case basis, it’s not uncommon to write off thousands of pounds. During the application stage, the insolvency practitioner should be able to estimate how much money you won’t need to pay back.

When might an IVA be a bad idea?

Although we’ve gone over just when an IVA might be right for you, and the qualifying criteria, it’s worth bearing in mind whether this debt solution could harm your career – and your monthly repayments.

Some industries, such as accountancy, law, or financial services, won’t employ those on an IVA. Therefore, before committing to this debt solution, you should check your contract to ensure that an IVA won’t be cause for dismissal.

Can I apply for an IVA?

If you’ve decided an IVA is right for you then let’s get your application started. Simply click the button below and we can advise as to whether this solution would be most beneficial. With any luck, we can help get you on the path to writing off your debts within a few short hours.