What Is An IVA?

Unfortunately, in the UK, thousands of people find themselves in serious debt. When this happens, it is very important to get good advice. Many people struggle on until they are completely overwhelmed by their debt. Fortunately, in the UK there are several ways of paying off debts even when your income is not adequate to allow you to do so completely. One of the most popular solutions is an IVA, which stands for Individual Voluntary Arrangement.

This is an agreement between you and your creditors that restructures your debt and brings it down to a level that you can manage to pay off. It is an alternative to bankruptcy.

The process is relatively simple. It consolidates all of your debts, which allows you to pay off the debts using one affordable monthly payment. In most cases, the IVA lasts for five years. This means that you can be debt free within five years. Repayments can start at as little as £120 a month.

Is an Individual Voluntary Agreement Right for You?

For many people this is a lifetime. However, IVAs are not suitable for all people. Firstly, you need to have debts of over £10,000 and the debts must not be secured debts. You also still need to be in regular employment to be able to put together a legal IVA.

It is also important to bear in mind that sometimes you will be asked to sell assets as part of the IVA agreement. For example, you may be asked to cash in things like ISAs. However, you will never be asked to sell your home as you would if you chose to go bankrupt instead.

Provided you follow the IVA to the letter, you will be debt free at the end of the contract. Creditors cannot change their mind and ask you for more money.

Where to Get Good IVA Advice

However, it is not an agreement you should enter into lightly. It is wise to use an independent company to advise you about IVAs and setup the process for you. They will act as a mediator between you and your creditors and ensure that the agreement that is drawn up is fair and legally binding.


To find out what you need to know about IVAs visit the Debt Free Direct site. There you can quickly work out if an IVA is the right answer for your debt problems.