Is an IVA Worth it?

An IVA (Individual Voluntary Arrangement) is a debt solution which can help regain control of your finances. It’s a very popular form of insolvency with thousands of people choosing to get one every year.

The ability to resolve your unsecured debts while typically writing off a portion of unaffordable debts, is one of the reasons why so many people choose an IVA.

If you're considering an IVA with us, we want to make sure that you're happy with an IVA, not just in the short term but well after we’ve finished working together. To help you decide if an IVA is right for you, we’ve included a list of considerations below:

Is an IVA worth it? – After approval

If you’ve had creditors chasing you for money while you’re watching the interest and charges increase on your account and feeling powerless to stop it, then an IVA should make things feel much better.

After an IVA is approved, creditor calls will start to cease while interest and charges are frozen. For the first time in a while, you might feel like you finally have some breathing room.

Your agreed payment plan has now come into effect and your financial future should look so much more manageable. It’s often during this point that our IVA customers might feel the benefits of choosing an IVA.

For these people, an IVA may now already be worth it.

The changing role of the insolvency practitioner

An IVA has to be put forward to your creditors by a qualified Insolvency Practitioner. Initially, their role will be as Nominee, in assisting you with the presentation of your proposal to creditors. Following the approval of the IVA the Insolvency Practitioner’s role changes to that of Supervisor as they manage your IVA.

The benefits

The primary benefit is the Insolvency Practitioner will now handle communications between you and your creditors. This means no more demands for repayment from lenders. Furthermore, they will provide any support and information you need regarding the IVA.

The negatives

As the Insolvency Practitioner will manage your IVA you will be required to co-operate with them throughout the term of the Arrangement. So although you will not need to communicate with your creditors you will need to keep in touch and communicate with them.

Is an IVA worth it? – During the agreement

The length of an IVA differs but usually lasts between five and six years. At the halfway mark, the IVA should now feel like an expense you need to make each month – similar to paying council tax.

Right now, you may be feeling quite indifferent towards the agreement. However, although making the monthly payment may feel like a chore, it’s usually so much better than struggling to make payments to your creditors.

The additional money saved, as well as the reduced stress, will hopefully allow you to enjoy the little things in life again. Whether that’s spending time with your loved ones or just being able to relax, an IVA has effectively given many people their lives back.

After an IVA – Is it still worth it?

Once the IVA is completed, you should be in a much better financial position. After all, your unsecured creditors have been repaid. You’re also now free to investigate other financial products without the approval of the Insolvency Practitioner – such as a mortgage.mortgage.

However, your credit rating following an IVA will be adversely affected. This means, at least in the short term, getting additional finance could be difficult.

Restoring your credit rating

Details of the IVA will usually appear on your credit file for six years from the date it started. While the IVA is on your credit report, lenders may be reluctant to provide you with additional funds. Once this is removed though, you can focus on improving your credit score. In time, through keeping on top of your debts, this should get better.

Is an IVA right for me?

Ultimately, getting on top of your finances makes an IVA worth it for many. However, if you need additional credit during or after the arrangement, you may be unable to do so.

If you think an IVA is right for you, then click the button below and we’ll let you know if you qualify. If so, you’ll work with a qualified Insolvency Practitioner who will help you understand exactly what to expect.

We hope, like so many of our customers, you think the IVA is worth it too.