FAQs
What’s an IVA?
This is one of the questions we get asked the most, so we have lots of
information on how an IVA works and what to expect.
Essentially, IVAs are a scheme that was introduced by the UK Government in
1986, to help consumers get on top of their finances and reduce debts. IVAs
involve you only paying what you can afford monthly towards your debts,
whilst your creditors agree to write off a portion as well.
This is a solution that lasts 5 years, but provides a solution for many consumers who
would prefer an alternative to things like Bankruptcy or Debt Management
Plans.
How long does an IVA last?
An IVA typically lasts around 5 years. An additional 12 months may apply if you’re a homeowner and cannot release equity in your home.
Following the completion, any remaining debt is completely written off and will no longer appear on your credit file following the sixth year.
Is an IVA right for me?
We won’t know whether an IVA is right for you until we have a thorough understanding of your personal circumstances, however, we wouldn’t suggest this option to you unless we felt this was a realistic option for you.
We’d recommend taking a look at our IVA Pros and Cons support page, which will highlight some of the advantages and disadvantages of this particular solution.
How do IVAs work?
An IVA is a legally binding, formal agreement between you and your creditors to repay a portion of your debt. An assessment of your income and spending is carried out. This will help determine what you can afford to pay into the IVA each month. Once an amount is established, your creditors vote to decide if the IVA should be approved. The majority of your creditors need to vote for the IVA for it to go ahead – once approved, the IVA usually lasts for 5 years, with any of your remaining debt written off at the end.
How do I set up an IVA?
Setting up an IVA is very straightforward, but this will need to be done via a licensed Insolvency Practitioner. To set up an IVA, you must include all your unsecured debts.
Also, there are certain criteria that, if met, mean you could qualify for an IVA – this includes things such as a minimum debt level and the number of creditors.
Our team at Money Advice can help get your IVA application together to submit to your creditors. We will always ensure that any proposed monthly payments are entirely affordable to you and that you thoroughly understand the process before you agree to anything.
What happens if I stop paying into an IVA?
If you stop paying into your IVA, you will likely breach your contract, and it will fail.
If for any reason, you are concerned that you will struggle to make a payment towards your IVA, you must inform your Insolvency Practitioner as early as possible. It may be possible for alternative arrangements to be made.
What information do I need for debt advice?
We’ll ask you about your income, outgoings and your creditors (the people / companies you owe money to) so we can put you on the right path to getting debt free.
We’ll also do a soft credit search to understand the full picture – but this won’t have a negative impact on your credit file or be visible to other companies.
How much does it cost to get debt advice?
Our online debt form is completely free to use, whilst giving us an initial idea of potential solutions for you and your debts. Any information or advice you receive from ourselves is also completely free.
If you are eligible for help with your debts through an IVA, the fee for the Insolvency Practitioners’ work and any other associated costs and fees will be included in your affordable monthly payment amount
We don’t take any payments upfront.
What if I don't know who I owe money to?
Don’t panic if you don’t know – with your consent, we can carry out a soft credit search that will bring up all your creditor information, including how much you owe and who you owe it to. A soft search means that no negative footprint is left on your credit file.
What if I’m not ready to talk about my debts?
Reaching out for help with your debts is one of the hardest steps you can take in the process – we know this. It’s never easy.
One of the most frequent pieces of feedback we hear from customers is that they felt like a weight has been lifted once they spoke with one of our advisors. Our team has a wealth of knowledge between us.
What debt solutions are available?
Once you’ve completed our free online assessment or spoken with one of our debt advisors, we will have a better idea of what’s going on for you. Then, we can discuss all the options you qualify for.
The main debt solutions include:
– Debt management plans (DMP)
– Individual Voluntary Arrangements (IVA)
– Bankruptcy
– Debt Relief Orders (DRO)
– If you live in Scotland you may also qualify for other options such as a:
– Protected Trust Deed
– Debt Payment Plan via the Debt Arrangement Scheme (DAS)
Gravity Plus LTD is a limited company registered in England and Wales. Regulated by the FCA – Financial Conduct Authority Reference Number 813465. Registered Office: Anchorage House, Unit 1, 252 The Quays, Salford, England, M50 3SD
Money Helper is an impartial service set up by the Government. They provide free debt counselling, debt adjustment and credit information services.