Is an IVA Right for Me?

Whether an IVA is worth it depends on the answers to five questions. We’ve detailed them all here. By the end, you should have a good idea.

An IVA is one option which can help clear your debts and restore control of your finances. It’s also a popular solution. Of all the insolvency solutions taken out in the third quarter of 2019, government statistics indicate IVAs made up around 60% of these.

Therefore, in those three months, more than 16,000 people decided an IVA was right for them. However, just because thousands of people use this solution doesn’t mean that you should too. After all, there are a range of IVA pros and cons. Here are some ways you can tell an IVA (Individual voluntary arrangement) is the best way to deal with your creditors.

An IVA may be a good idea if:

  • I want to write off my debts

The ability to write off debt is one of the most attractive reasons for choosing an IVA. Although there is no set amount routinely written off, sums totalling thousands of pounds are common. If you can’t see a way to realistically pay what you owe, an IVA may be the best option for you.

  • I want someone else to deal my creditors

If you owe money to multiple creditors, and they’re all demanding payment, this situation can be stressful to say the least. Another benefit of an IVA is that an appointed professional will deal with creditors on your behalf.

Therefore, once this agreement comes into effect, most forms of communication with these organisations should cease. You should never receive a demand for payment while the IVA is active.

Consequently, this is a great solution for ensuring peace of mind.

  • I’m unable to pay my debts

An IVA is a form of insolvency which means you should be in a position where you realistically cannot afford to repay your debts.

  • I’m happy with the repayment period

An IVA isn’t a quick solution to your debts. Under most circumstances, an IVA will last for around five to six years. Given the benefits of this solution though, many consider the time limit worth it.

  • I’m able to make the monthly repayments

Throughout the length of an IVA, you will make affordable monthly repayments towards your creditors. The specific figure will be agreed during the agreement stage, but you should have a reliable source of income to ensure that payments continue to be made.

Although circumstances change, and this figure can sometimes be adjusted to suit your needs, the repayments are something worth considering before committing to an IVA.

But do I qualify for an IVA?

Although you might now be thinking an IVA is a good option, it’s important to determine if you are eligible. There are several qualifying IVA criteria to bear in mind:

  • You can make the monthly repayments;
  • You owe more than £6,000;
  • You owe money to more than one creditor.

If you fulfil the points mentioned so far then, chances are, this solution is a good option for you. Get in touch and we’ll do the hard work.

Apply for an IVA

When is an IVA not right for me?

It’s important to also mention when an IVA might not be a good idea. As well as not fulfilling the qualifying criteria mentioned above, you should ensure your job won’t be affected in the event of insolvency. For example, industries such as accountancy, law, or other financial services generally won’t employ those with an IVA. It’s important to check your contract beforehand to ensure your job is secure in the event you pursue this solution.

Do I have other options?

If you’ve decided an IVA is not right for you, then there are a range of other options available which may prove more beneficial. For example:

You can find out more information about these – and other alternatives – on our debt solutions page. Otherwise, feel free to get in touch and we’ll help identify the best option for you:

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