Next Steps
The next step is to find out which debt solutions you might qualify for. Answer some simple questions and one of our qualified debt advisors will call you to discuss what options are available to you.
Individual Voluntary Arrangement (IVA)
What is an Individual Voluntary Arrangement (IVA)?
An IVA is available in England, Wales & Northern Ireland. Freeze all interest & Charges. Write off a percentage of your debt. Pay one affordable monthly payment. Be debt free in 60 months (possibly 72 months if you are a homeowner).
Find out more about how an Individual Voluntary Arrangement (IVA) works and which debts it covers. Then talk to a free debt adviser about whether it’s the best way to pay off or clear your debts.
How an IVA works
An Individual Voluntary Arrangement (IVA) freezes your debts and allows you to pay them back over a set period. Any money you still owe after this period is then written off.
You can apply for an IVA if you can afford to pay something towards your debts but not necessarily the full amount that your creditors want. You will need to show you have a regular long-term income as the repayments will usually cover a period over 60 or 72 months (five to six years). If you have a lump sum to pay towards your debts, you might also qualify for an IVA.
The IVA is set up by a qualified professional called an Insolvency Practitioner, who will work with you to put together a proposal to take to your creditors for approval. It very much depends on what your circumstances are as to whether they will agree to the plan.
An IVA is a legally binding agreement between you and the people you owe money to.
Which debts can you pay off with an IVA?
You can use an IVA to help pay off many common debts, including:
- Overdrafts
- Personal loans
- Catalogue debts
- Council Tax arrears
- Hire purchase debts
- Mortgage shortfalls
- Credit and store cards
- Money you owe to HM Revenue & Customs, like income tax or National Insurance contributions
Which debts can’t you pay off with an IVA?
You can’t use an IVA to pay off:
- Student loans
- Magistrates’ court fines
- Certain types of car finance
- Child maintenance or Child Support arrears
- Mortgage and rent arrears
Technically, you’re allowed to include mortgage and rent arrears and other secured loans against your property in an IVA. However, your creditors have to agree to this and often they won’t do so. Check with a debt adviser what you can and can’t include in an IVA.
How to set up an IVA
You have to set up an IVA through an Insolvency Practitioner. There are fees to pay to the Insolvency Practitioner which are usually taken from your monthly payments. You should not have to pay any up-front charges before your IVA has been set up.
Get advice about setting up an IVA
It’s always best to talk things through with an experienced debt adviser before you decide to take out an IVA. This is because the debt solution that is best for you depends on your personal circumstances and might not be this one. Debt advisers can help you make the right decisions so that most of your money will go to paying off your debts. Which means that you could be debt free sooner than you thought.
A debt adviser will:
- Treat everything you say in confidence.
- Give advice about better ways of managing your money.
- Never judge you or make you feel bad about your situation.
- Suggest ways of dealing with debts that you might not know about.
- Always be happy to talk to you, however small or big your problem is.
- Check you have applied for all the benefits and entitlements available to you.
You might only need to have one conversation with an experienced debt adviser to make sure that your plan to manage or clear your debts is the right one for you. If you need more support or don’t know where to start, you’re not alone. Nearly half of people in debt told us they aren’t sure about the best way to pay off their debts, and that is where a debt adviser can really help you. Over eight out of ten people who have got debt advice tell us they feel less stressed or anxious and more in control of their life again.
People who let a debt problem build up often find things have:
- Spiralled out of control
- Their cards are maxed out
- No-one else will lend to them, and
- It takes much longer to pay back what they owe.
Credit Clarity has no upfront fees or set up costs, your conversation with us is confidential and you can contact an adviser in a way that’s best for you – online, over the phone or face-to-face.
Take the first step to being debt free.