September 22, 2023
IVA Debt

IVA Debt | Is it Right for You?

Are you and your partner, or are you family, living beyond your means? Do you have over £10,000 of unsecured debts? Are you paying more than 20% of your salary on your personal debts? Are you developing a realistic plan to repay your debts over time?

If the answers to these questions are yes, then an individual voluntary arrangement may not be a financially advisable financial solution. However, if the response to this question is no, then an individual voluntary arrangement may be the answer.

How much does it cost?

In some cases, the fees involved in establishing an IVA can be overwhelming, and you may wish to shop around in order to find a deal that is as affordable as possible.

You will want to make sure you have a full understanding of all the costs and implications that an individual voluntary arrangement involves. Each case will be different and I cannot make any guarantees that certain companies won’t charge excessive fees. Your only right is to take your time to shop around, and take professional advice from two or more companies in order to get the most affordable Individual Voluntary Arrangement.

Will it write off my debts?

Can your debts be written off? An IVA can write off a substantial proportion of your debts, and in certain cases, where a partner is involved (either jointly or severally with the main link partner) an IVA can wipe off up to 75% of the partner’s shared debts.

Why do I need a professional advisor?

In setting up an individual voluntary arrangement, if you can afford it then you have a right as a person that is bankrupt to use a registered insolvency practitioner to help you with your affairs. These are typically legal professionals who will also offer guidance, support, and advice on how best to proceed, should you be made bankrupt. It is important to operate with a qualified, regulated, legal expert in order to rebuild your financial future with an IVA.

Some companies may try to persuade you to set up an individual voluntary arrangement without using a legal professional. There may be aspects of an individual voluntary arrangement that you are unsure about, so it is particularly important that you take independent and professional advice on each.

How to compare IVA providers

When comparing IVA providers, it is vitally important that you look beyond the quotes, and ask for full details of the terms and conditions. Make sure that you are totally clear on your obligations should your circumstances change in the future. Read up as much as you can on the topic, so know where to look for information on IVAs and contract clauses as well as general terms and conditions. Be sure to follow up your questions with an email to the company – if you don’t like what you find on your correspondence, then simply contact the company again to ensure you get a proper response.

The best and easiest way to find the best IVA provider is to follow the recommendation to look in the Yellow Pages or to make use of the internet. The internet has a multitude of indexes to single quotations and, if you are fortunate, you will find all you need to know about IVAs and reputable providers. By starting with this simple and straightforward process, you can quickly identify companies that are well-established and who can answer all your questions confidently.

So, is it right for you?

Ask yourself the right questions. Consider consulting in a professional financial advisor. The success you’ve achieved will depend on your ability to follow this advice. If you don’t do your homework and shop around, you could end up with the wrong company, or worse still, an unlicensed company which is about to become bankrupt.

Katie Cohen

Katie is a professional content writer for Technical Writers with a first class BA (Hons) Business Management degree. She acquired her experience and expertise in the finance sector of business from her time as a junior accountant. She thoroughly enjoys working in a variety of industries to gain more insight into the business world.

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