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How Do I Choose an IVA Company?

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between you and your creditors to repay your debts over time. Therefore, it’s crucial to work with a reputable and trustworthy company.

Always research and compare different IVA companies. Ensure the company is registered and accredited by a relevant body.
Use the Financial Services Register to verify if a firm is authorized and has permission for the services it offers. IVA companies are not required to be authorized by the FCA, as the Insolvency Practitioner (IP) is personally regulated by a Recognized Professional Body (RPB) such as:
– Insolvency Practitioner’s Association (IPA)
– Institute of Chartered Accountants of Scotland (ICAS)
– Institute of Chartered Accountants in England and Wales (ICAEW)
– Chartered Accountants Ireland (CAI)

How Do I Know If an IVA Company Is Good or Bad?

Choosing to enter an IVA is a significant decision, so it’s essential to carefully consider all your options.

Do research and discuss them with family or friends if needed. A reputable IVA company will keep you informed throughout the process, showing what debt solutions best suit your personal circumstances, clarifying each step and setting expectations. Before signing up with an IVA company, ensure the IVA is handled by a licensed Insolvency Practitioner.

Avoid companies that pressure you for a quick decision. As with any debt solution, it’s critical to ensure you’re fully informed before making a decision about whether an IVA is a good option for you.

Are There Free IVA Services?

IVA services are never entirely free. While debt charities may offer free debt services, they still charge IP fees and service costs, which will be passed on to your creditors. This might mean you won’t get as favourable a repayment deal as you would with a private company.

How Long Does an IVA Last?

An IVA typically lasts five years, but this can vary based on individual circumstances. If there are changes to your financial situation, the IVA could be extended.

How Long Does It Take to Set Up an IVA?

Setting up an IVA generally takes between four to six weeks. The exact duration depends on how quickly you provide your financial information, the complexity of your financial situation, and how long your creditors take to respond.

How Long Does an IVA Stay on Your Credit Report?

An IVA remains on your credit report for six years from the approval date. Even if you complete the IVA early, it will still be marked as ‘complete’ but not removed until the six years are up.

Can I Get My IVA Debt Written Off?

At the end of the IVA term, any remaining unsecured debt covered by the agreement is usually written off. This means you won’t have to pay the remaining balance after successfully completing the IVA.

Do I Have to Be Employed to Enter an IVA?

No, you can enter an IVA if you are unemployed, self-employed, part-time, full-time, retired, or receiving benefits. There is no set minimum payment for applying an IVA, but if you consider entering an IVA with a private service company, you would be expected to be able to afford at least £80 in spare income each month to pay towards your debts. Before that, the company will carry out a full assessment of your circumstances to decide what you can afford.

How Will an IVA Affect My Credit Rating?

An IVA will be recorded on your credit report, which will lower your credit score. Here’s how to improve your credit score after an IVA.

Can I Improve My Credit Score After an IVA?

As your IVA ages, your credit score should gradually improve, especially as lenders focus more on your recent credit history. Once your IVA is marked ‘completed’ and eventually removed after six years, your credit score may still be low due to limited credit activity during the IVA period, but there are steps you can take to improve it.

Will an IVA Stop Bailiffs?

Yes, if you have any outstanding court actions, including the use of a bailiff, they will be stopped once an IVA is in place. Bailiffs will no longer be able to collect debts included in the IVA.

Can You Pay Off an IVA Early?

If your circumstances change or you receive a windfall, you may be able to settle your IVA early. Your IP will make an offer to your creditors, known as a Variation. For it to proceed, at least 75% of responding creditors must agree.

What’s the Difference Between an IVA and a Debt Management Plan?

Both Debt Management Plans (DMPs) and IVAs allow you to make manageable monthly payments to creditors. However, an IVA is a formal, legally binding agreement that prevents creditors from contacting you directly, while a DMP does not offer this legal protection, allowing creditors to pursue legal action to recover debts.

What’s the Difference Between an IVA and Bankruptcy?

Both IVAs and Bankruptcy are forms of insolvency and require certain fees. IVAs protect your assets while you make reduced payments over five to six years. In contrast, Bankruptcy typically lasts around 12 months and offers little asset protection. An IVA requires repaying the debt with an affordable monthly payment., while Bankruptcy only requires covering the fees associated with the process.

*Approved IVAs will stop interest and charges. For Debt Management Plans we’ll always aim to freeze interest & charges, and we succeed over 95% of the time.