Debt Free in 5 Years
An IVA will last for a fixed period of time. This is agreed with the creditors at the beginning of the arrangement and is normally no longer than 5 years. Once this period is over and you have met your obligations of payment, any remaining debts which were included within the arrangement will be written off by your creditors.
Telephone Calls and Payment Demands Stopped
Once the IVA is agreed, your creditors are no longer allowed to demand payments from you either by telephone or letter. All of this type of contact from creditors is stopped by law. This means that you are free to concentrate on the other important things in your life such as your family and job.
Interest and Late Payment Charges Frozen
After the IVA has been put in place, your creditors can not add further charges or interest to any of your accounts covered by the agreement by law.
Single Monthly Payment
At the beginning of the arrangement, you agree with your creditors what you can afford to pay each month. Then, all you need to do is make a single payment into a special bank account normally once a month. The money collected is shared out to the creditors on your behalf. All you have to worry about is a single affordable monthly payment. In some cases, you can pay a one-off lump sum.
Repaired Credit Rating
During your IVA, you will not normally be allowed to borrow more money (although it may be possible to take a mortgage while within an IVA). However, once you have successfully completed your arrangement, you are once again allowed to borrow money and your credit rating will be repaired. You will not be credit blacklisted for life!
Fixed, Legally Binding Agreement
Once agreed, the IVA is legally binding on all the creditors. This means that they are not allowed to make sudden changes or demands to the arrangement. Therefore, you know exactly where you stand and exactly how long it will be before you are debt free.
Protection from Court Action
Once an IVA is in place, your creditors are not allowed to take further legal action against you such as County Court Judgements as long as you stick to the terms of the arrangement.
A Private Agreement
If you undertake an IVA, it is a private matter between yourself and your creditors. There is no publicity in the local papers. No-one will be told about your situation (other than your creditors) unless you choose to tell them yourself.
Professional Status Unaffected
If you hold a professional position (e.g. doctor, solicitor, accountant) or are a company director or member of the police/armed forces, you can carry out an IVA without any adverse effects to your job.
Possible Release of Home Equity If you have any equity in your property (or any other significant valuable assets), you may be required to release some or all of this as part of the IVA agreement.
Minimum Level of Debt Normally you will only be able to undertake an IVA if your total unsecured debt is more than £15,000. In addition, you will need to be able to afford a monthly payment of at least £200.
No Unsecured Borrowing During the Arrangement While you are in an IVA, you will not be able to use your store or credit cards. These must be cut up. In addition, you will normally not be allowed to borrow any more money until you have successfully completed your arrangement. It may however be possible to change an existing mortgage or take a new one while you are in an IVA.
