You can’t afford to pay your debts

An IVA is a type of insolvency. You should only take out an insolvency solution if you can’t realistically afford to pay your debts.

You owe money to multiple lenders

If you owe money to multiple lenders and they’re all demanding payment, an IVA may be a good way to make sure everyone is treated fairly. With a regular payment IVA, you’ll make one monthly payment and this will be divided between your lenders based on how much you owe each one.

You want to write off some of your debt

If you’re not going to be able to pay off what you owe in a reasonable amount of time, an IVA may be a suitable option. With most IVAs, you make payments for five or six years. After that time, any remaining debt included in your IVA is written off. On average, the IVA customers who come through us have about 70% of their total unsecured debt written off but it can be as much as 85%.

You want to protect your home

If you’re a homeowner, you won’t be forced to sell your home if you take out an IVA. But you may need to remortgage to raise money to go towards your debts. If you’re unable to remortgage, you may need to carry on making your IVA payments for up to an extra 12 months. Learn more in our guide on IVAs and mortgages.

If you’re renting, an IVA won’t usually affect your living situation. But some private landlords include a condition in their tenancy agreements that mean you could be asked to leave if you take out any form of insolvency solution. You should check this first.

You want to prevent your lenders taking further legal action

Once an IVA is approved, lenders can’t take legal action against you or add any extra interest or charges to your debts. This may provide valuable peace of mind if this is a concern for you.

You’re able to make the monthly repayments

Most IVAs involve making monthly payments for five or six years. The amount you’ll pay each month will be based on how much disposable income you have after covering all your essential costs. This amount will be reviewed throughout your IVA but you’ll need to have a steady source of income to make sure you can keep up with your payments.

As well as making payments towards your debts, you’ll also be charged fees for an IVA. These very between companies. If you get an IVA from our sister company, there are no up-front fees. All your fees will be paid out of – not on top of – your regular, affordable IVA payments. Read more about individual voluntary arrangement fees.    

It won’t affect your job

For most people, an IVA won’t affect their job. But it may prove problematic in certain professions. If you’re a solicitor or an accountant, for example, you might not be able to carry on in your current position with an IVA. Or you may only be allowed to keep your job subject to certain conditions. You should check if there will be any repercussions before applying for an IVA.

You’re aware of the effect on your credit rating

An IVA will remain on your credit file for six years from the date it’s agreed. You’ll probably struggle to borrow from mainstream lenders during this time.