What is an IVA?

An IVA is a way of paying larger amounts of debts in a fixed repayment period of 5 years.  If your creditors agree to your IVA at the end of 5 years any debt that is remaining is written off.  In some cases you can get as much as 85% of your debts written off with an IVA.

When you are in an IVA you pay a reduced monthly payment that is based on what you can afford after paying your essential bills like your mortgage, rent, utility bills, food and transport.

An IVA is a formal debt solution so you must keep up repayments to your IVA as failure to keep up payments can result in bankruptcy.  Also if you own your own home or have any assets these will be taken into consideration by your creditors.  Your expenditures will be restricted whilst you are in an IVA. However if you speak with a Refresh Debt Adviser they will be able to conduct a full fact find of your circumstances and advise you of the factors you should consider when looking into an IVA.  Refresh Debt Services do not operate IVAs inhouse as they need to be set up and supervised by a licenced Insolvency Practitioner.  If you are suitable for an IVA your Refresh Adviser may refer you to an Insolvency Practitioner to assess your IVA application further.

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“Having found myself in a financial mess I was unsure where to turn, it was a balancing act and at any point the balls were going to crash down. I discovered Refresh and they took care of everything right from the first phone call I made to them, giving me all the information and advice I needed in plain English. The advisors are there with you at every step guiding you though and answering the questions that you may have. Using Refresh has made everything so much easier and stress free with just one payment made to them they take care of everything else making sure all your creditors get paid. I would not hesitate to recommend them to anyone else.” Kimberley, Herts

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Advantages of an IVA

Affordable monthly payments over a fixed period, usually 5 years.

Creditors must freeze all further interest, cannot take further legal action against you and will not contact you during the IVA.

Your home is not at risk as it could be in Bankruptcy

Once the final payment is made, any outstanding debt is written off by the creditors.

The IVA is discreet and can be used by professionals, forces personnel and the police without damaging career prospects.

Disadvantages of an IVA

Although the advantages of an IVA are significant, undertaking an IVA is a serious matter. As such, there are some things that you must bear in mind.

The IVA will be recorded on your credit file. This means that you will not be able to take further unsecured borrowing for the period of the IVA.

Once the IVA is completed (normally after 5 years), you can borrow again. However, it may take some time for your credit rating to repair.

If you are a home owner, during the course of the IVA you may have to release available equity from your property to increase the overall settlement offer to your creditors. If no remortgage is available an IVA may be extended for 12 months

Whilst your name is not published in the newspaper, it should be pointed out that the IVA will be entered onto the government insolvency register, which is a searchable public database.

Whilst you can arrange to miss IVA payments in certain circumstances, if you do not make the IVA contributions as agreed with your IP, your IVA could fail which could lead to bankruptcy.

There are restrictions on the expenditure of a person who enters into an IVA during the term of the debt solution

Only unsecured debts included in the IVA may be discharged at the end of the period and unsecured debts not included remain outstanding.

Your creditors may not approve the IVA, in order for the IVA to be put in place over 75% of the votes must be in favour of the IVA.

Fees & Key Information You Need to Know Before Joining a Debt Management Plan

Our debt solutions are unique to each client to help you discover the quickest most cost effective method out of debt. Our fees are 100% dependent on your personal circumstances and we offer a unique Money Back Guarantee at Refresh Debt services we are upfront about our costs. Click here for Fees & key info.

Repaying your debt over a longer period of time can increase the total amount to be repaid. Your ability to obtain credit will be affected in the short term and may also be affected in the medium to long term. Fees are payable when continuing service is provided. A debt solution increases the likelihood of falling into arrears or increasing arrears.

You can also read The Insolvency Service’s guide ‘In Debt? Dealing with Your Creditors’.