Pay off your debts with an IVA

An IVA (Individual Voluntary Arrangement) is a way to help you pay off unsecured debt without declaring bankruptcy. If you're in a 'debt spiral', an IVA could bring your finances back under control - and give you a clear date when you know you'll be free from your unsecured debts.

With an IVA, you could:

• Pay off your unsecured debts in 5 years (in most cases)
• Reduce your monthly payments
• Protect your home (tenants & homeowners)
• Prevent (further) legal action, including bankruptcy

Key facts about our fees and services

Information about our service and fees - After discussing your situation with our expert advisers, you may be advised to enter a debt solution.

If you decide to enter a solution with us, there will be fees involved. However, at Debt Advisers Direct we strive to provide our customers with the very best service at competitive rates. For more information on our fees, please click here.

Can I cancel the agreement? Remember, you're under no obligation to enter a debt solution with us - but if you do, and you change your mind, you've got the right to cancel your agreement with us at any time during the first two weeks of accepting our terms of business. Please note, IVAs are legally binding and once approved do not have a "14 day cancellation" period.

My credit rating - how will it be affected? Whilst you're on a Debt Management Plan, your credit rating will be affected in the short term. Depending on the agreement, it may also be affected in the medium to long term too.

What is an IVA?

An IVA is a legally binding debt solution that's designed to help you pay off your unsecured debt.

If your unsecured debts are so serious that you're really worried about bankruptcy or repossession, an IVA could be the best way for you to pay off your debts without declaring yourself bankrupt, losing your home or struggling to pay more than you can afford each month.

IVA questions and answers:

How can I afford my monthly payments?

Will I have to repay all my debt?

What if my creditors try to make me bankrupt?

Will I lose my house?

Will I ever be debt-free?

Q. How can I afford my monthly payments?
A. Payments to your IVA would be based on what you can afford on a monthly basis. If your income has dropped and/or your debts have grown, this can make an enormous difference to your daily life.

Q. Will I have to repay all my debt?
A. It's extremely rare for someone in an IVA to have to repay all their unsecured debt - and you'd know in advance exactly what you'd be signing up to.

Q. What if my creditors try to make me bankrupt?
A. Once the IVA has started, and you stick to the terms, your creditors would not be able to take any legal action against you. If they've already started action, they'd have to put a stop to it.

Q. Will I lose my house?
A. You're extremely unlikely to lose your house in an IVA. In fact, it should help you stay in your house, as your IVA payments would be calculated to leave you enough for your mortgage/rent payments - as well as food, petrol, clothing and all your other essential expenses. However, homeowners may be required to release equity from their property during the last year of the IVA.

Q. Will I ever be debt-free?
A. Yes - you'd even know exactly when. As long as you can stick to your side of the agreement:
  a. Your creditors won't be able to change their minds.
  b. Your payments won't increase (unless you earn more).
  c. Your debt won't grow.
  d. Your IVA won't last longer than you expected.

How do I start an IVA?

Call one of our debt experts today on 0800 074 8639. Talk them through your financial situation and they'll tell you if an IVA is likely to be the best solution to your money worries.

If it is, you'll work with one of our Insolvency Practitioners (IPs) to draw up an IVA Proposal - a formal plan which we can submit to your lenders, so we can find out if they'll agree to the terms of the IVA.

What happens next?

If enough of your lenders agree, your IVA can start. As long as you keep up your side of the agreement, your IVA will come to an end five years later - and your unsecured debts will have been paid off.

Are there any drawbacks to an IVA?

An IVA is a form of insolvency, and will have a serious effect on your credit rating for six years from the time it starts, making further credit more expensive and/or harder to find during that time.

You may have to contribute a portion of any additional income you receive (such as overtime or bonuses).

If you're a homeowner, you'll probably have to release equity from your home in the final year of your IVA. On the other hand, you're extremely unlikely to have to sell your home.

Plus, an IVA requires commitment. No-one can see the future, but if you can't be reasonably sure you'll be able to keep up with your payments, an IVA is unlikely to be the best way for you to pay off your unsecured debts.