IVA Questions

Introduction to IVA Questions

During a recession many people find that they are not able to manage their debt. There are problems at all times, but job losses and inflation puts more of a strain on your finances and it is not always possible to keep up to date with the bills.

An IVA is an Independent Voluntary Agreement made between you and the organisation you owe money to. This will be a commitment that you must keep to and if there are problems they should not be ignored but you may look at them with your advisor to try and reassess your payments. There will be a lot of questions you want to ask before you sign up for this.

Am I Eligible to Apply for an IVA?

It is very easy to know if you can apply for an IVA as you must owe money to at least three different organisations and your debt must total £15,000 or more. It is important that you or your partner are in regular employment as not sticking to the agreement could render it invalid. I f you find you are not suitable there are other ways to deal with your problems but this one has many advantages.

What Are The Advantages of an IVA?

The main advantage is that as soon as you sign up, the charges and interest will no longer go up. You will also not be under pressure from one company or another to pay them more than any other creditors. The monthly payment you make is sent to your advisor and they make sure the right firms get their payment. You may also find out that you may not have to pay back up to 75% of what you owe and you could be free of your debts within 5 years.

The final advantage is one that may in some ways be the most important for you. The advisor will deal with all letters and phone calls in relation to your debt. This will greatly relieve any stress you have been under.

Are There Any Conditions?

  • You will have to declare any money you receive throughout the life of the agreement. This may be an inheritance or any other way of obtaining money over which you have no control.
  • You will find that a mortgage will be more expensive. An existing one may not be affected but you now may be classed as a high risk and will need to go to a subprime lender – they lend to people who do not qualify with many other lenders.
  • You will only be able to have a basic bank account as the option of an overdraft may lead you to building up more debt.
  • Family debts may not be included, so it will mean that in order to honour them you will need to pay them out of the money you have left.

This is your debt and so the people you live with should not be affected. It will mean you do not have as much money to put into the household budget as you may want but their money cannot be affected. The IVA will appear on any credit check made about you, but once honoured this will also be stated. Any further questions you have regarding IVAs can be raised with your advisor.

Back to Top