Our insiders can help write off unaffordable debt through various types of arrangements with your creditors. Most solutions focus on getting an agreement between you and your unsecured debt creditors, which allows you to repay only what you can reasonably afford over a fixed period of time.
Your exact circumstances will influence which strategy is best for you, which is why speaking to an expert is the best place to get started.
Debt/Insider links you with a specialist that can offer help on how you can get control of your debt.
Our quick, free online assessment asks the essential questions to determine if you qualify for help
We know you’re going through a hard time and our insiders are here to help with any support or advice that you might need
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Debt/Insider website provides a means by which you can communicate with Debt Advisors and Insolvency Practitioners. This means we do not have to be regulated by the FCA in the United Kingdom. Nothing on this website constitutes financial advice. This website provides information only, and the choice of product is for you alone to choose.
An Individual Voluntary Arrangement (IVA) is a formal debt solution that creates a legally binding agreement between you and the people you owe money to. You may decide to enter an IVA if you’re struggling to repay the total amount of unsecured debt you currently have but can repay some.
An IVA can be a positive way to manage unaffordable unsecured debt and allow you to better manage your monthly finances.
In an IVA a single monthly payment is agreed with your current financial situationtaken into consideration – this payment is then divided between the people you owe money to. During the course of your plan all interest and fees associated with your debts are frozen.
At the end of the IVA the remaining debts are written off and you can begin your debt-free future.
Usually you will only be able to undertake an IVA if your total unsecured debt is more than £6,000. In addition, you will usually need to be able to afford a monthly payment of at least £80.
Yes, an IVA will have an impact on your credit rating as it will show on your credit report for six years after it has been approved. However, it’s important to note this is the case for most debt solutions and your credit score will likely already have been affected by being in debt in the first place.
Once your IVA is complete you will be offered a fresh start to begin rebuilding your credit rating.
While you are in an IVA, you will not be able to use your store or credit cards. These must be cut up. However, it may be possible to change an existing mortgage or take a new one while you are in an IVA. In addition, you may be approved to borrow up to £500 if this is agreed with the insolvency practitioner. You will be able to use prepaid cards.
Damaged Credit Rating
Your credit rating will be effected and you will be unable to borrow for the duration of the IVA. You will also have a period after your IVA where it may be hard to get credit. This period varies but a credit rating can be repaired over time.
Longer than Bankruptcy
An IVA will usually last for 5 years compared to bankruptcy which will usually only last 1 year unless you have a payment order and this will last three years.
You will pay back more than you will in bankruptcy
In an IVA you will pay back as much as you can afford over the 5 years (e.g. 20%-50%) as opposed to bankruptcy where you will pay back a minimum amount (which could be as little as 0%).
You must include all creditors
All creditors must be included and you cannot make separate arrangements with each one (which can be done in a DMP).
Some jobs do not allow the employee to become bankrupt or be in an IVA. It is important to check the terms and conditions of employment to be sure of this.
IVA is a form of insolvency as is bankruptcy, so your name can be searched in the insolvency register which is available on the internet. However, someone would have to have a reason to do this; the information is not advertised in any way.
Risk of Bankruptcy
If IVA fails there is a risk of bankruptcy and lenders can chase customers for the debt and interest was suspended could be added to their debt
Impact On Mortgage Rates
Homeowners may need to release equity from the value of their homes to pay off debts, and a remortgage may attract higher interest rates or, if no remortgage is available, an individual voluntary arrangement may be extended for 12 months.
No Guaranteed Acceptance
Lenders do not need to approve the IVA
Doesn’t Cover All Debts
Debt not included within the IVA will remain outstanding
Debt/Insider website provides a means by which you can communicate with Debt Advisors and Insolvency Practitioners. This means we do not have to be regulated by the FCA in the United Kingdom. Nothing on this website constitutes financial advice. This website provides information only, and the choice of product is for you alone to choose. We process any information you provide us and we may pass this onto our trusted third party partners. Debt/Insider is a website used for marketing purposes and no advice is provided directly from this site. Debt/Insider introduces you to a potential partner that can help give you individual advice and match you to the right solution for your personal circumstances. These partners are Debt Advice services and Insolvency Practitioners, that are regulated by the FCA in the United Kingdom. We are sometimes paid a fee for the introduction. At no time do we state that the advice provided to you is ideal for your circumstances; once you obtain advice from our partner, your relationship is with the partner, and we are not responsible for that advice.
We will sometimes use testimonials or case studies from our clients or partners and publish these online, including on social media. When we do this, we will often use actors to deliver and present the content that we have received from real clients or partners.
** Average Debt Source : https://www.tuc.org.uk/news/unsecured-debt-hits-new-peak-ps14540-household-tuc-analysis.
© DebtInsider.co.uk 2020. DebtInsider.co.uk is a trading style of Webfibre Limited. Licenced by the Information Commissioners Office, (Registration Number ZA334093) Registered in the UK, number 09465202, Registered Office Address, Sovereign House, Llantrisant, CF72 8YX.
To find out more about managing your money and getting free debt advice visit, Money Helper, an independent service set up by the Government to help people manage their money.
You may also find this useful – https://insolvency-practitioners.org.uk/regulation-and-guidance/guides-for-people-in-debt/
* Please note, the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors. The example provided of 81% has been achieved by some people but in no way is guaranteed.