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Individual Voluntary Arrangement — Necessary Solution for Debt Elimination


IVA has the power to play the multi-role in debt elimination. Thus, helping you in regaining the control of your daily life. After analyzing your financial situation, can you obviously think of it is an iva a good idea? Well, the answer will be – it depends upon certain circumstances.

On the very first note, you need to know the details that it is an iva right for me. After that, compare it with all the other items that have the same functions as IVA. Furthermore, knowing the pros and cons of what is a iva debt will also be much helpful. Only after that, just go for it with a positive mindset, without any hesitation. 

IVA: Benefits

  • All the actions take place legally
  • Creditors won’t bother you at all
  • The time span is limited
  • Limited payments at the end of the month

Is IVA a Good Idea?

Of course, IVA will be a good idea when you are struggling with the debts. But, what are the main reasons behind that? Let’s learn them one by one: 

Paying Back the Debts

The principal task of the IVA is rescuing you from the debts. As the IVA has this ability, it will be a good idea to opt for it. There is no boundary of the debt amount, but you have to meet the minimum requirements regarding that. On the other hand, it will also release you from the struggle phase of paying back the debts to the creditors. 

Avoiding face-to-face Communication

Well, here the common question arises, is an IVA a good idea to deal with the creditors legally? Yes, it is good, somehow the best idea. After opting for an IVA, the creditors will never be able to contact you directly. 

In between you and the creditors, a person will be responsible for maintaining the communication between both of you. He/she is generally known as the practitioner of insolvency. 

Not Enough Money to Pay

Is an IVA a good idea when you are running low in funds? Yes, absolutely. When you are unable to pay the debts, IVA will help you in dealing with the matter. It will help you in paying a limited number of the amount, at the end of every financial month. This will help you in maintaining the flow of your life in an easier way. 

Gaining more Time

The time period for the IVA is quite long. Within this period, you will be able to think clearly — what to do and what not to do, about the remaining debts. Getting accompanied by the benefits, the payment will be complete, slowly and steadily. 

Struggling with the Monthly Payments

When you are unable to pay the monthly payments, IVA will play its positive role in it. It will reduce the monthly amount, and that you will pay, will be within your budget. Thus, there will be no extra expenses at all. 

IVA: Eligibility Criteria

  • More than one creditors
  • Must have the ability to make monthly payments
  • Borrowed money more than six thousand pounds
  • Absence of assets that has an equity value

What is a iva debt ? Might not be a Good Idea….

what is a iva debt and it is a good idea? Now the answer will be NO, just because of your profession. Several people work in many organizations based on their own field skill. When you are working in the private or government commerce departments like accounts, finance or law, IVA will not be suitable for you. 

On the other hand, IVA will not help you if your debts are less than six to ten thousand pounds. The unavailability of a large sum of money for the repayment will also play its crucial role in IVA’s incompatibility towards you.

Take Risks, Make Progress

is getting an iva a good idea? Yes, IVA will be a good idea for you when you are ready to bear the cost and willing to take all the upcoming risk. Your home might fall into the category of risk while dealing with the debts and the creditors as well. Moreover, your savings or ongoing deposits, after retirement pension, can also be included within the terms. 

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The costing is a bit expensive. But, if you think logically, it is not more than the debts you are about to pay. On the other hand, it is not at all more expensive than the pressure that you are having, regarding the apply for iva in UK. So, the expert suggestion will be needed. 

Is an IVA a Good Idea for Debt Protection?

Yes, you will receive every type of legal protection from the IVA. Following the agreement, the creditors will never be able to take any type of informal actions against you. The amount that you will pay at the end of the month must be gladly accepted by them, at any cost. 

Is an IVA a good idea? Frequently Asked Questions (FAQ)

When debt advice suggests an IVA as your ultimate debt solution, it is worth asking, “Is IVA a good idea?” because you have to be cautious about it, right! It would help if you thought an IVA was appropriate as you do not want any other financial affairs upon the lots.  Well, for a fact, an IVA is a good idea and worth the cause if you have many debts to pay off but cannot do so instantly. To know if an IVA is a good idea for you, the IVA Supervisor will thoroughly examine your financial situation and personal matters. For this, your income and expenses, your debts and assets, all will be factored in. While you can get the IVA advice for free initially, you have to pay up some IVA fees and costs for other IVA setup and processes. So, if these additional IVA costs are okay, you can go along with your IVA proposal. And don’t worry, the IVA Supervisor asks for fees only if your IVA proposal is approved. By that time, you still have enough matters to think about.  If you are struggling with the thought of “is getting an iva a good idea?”. You better consult with reliable IVA help. 
Once you have got the answer to “Is IVA a good idea?” you can proceed to apply for an IVA. The first thing that comes in IVA setup is to get yourself a professional and licensed Insolvency Practitioner (IP). The IP will act on your behalf for every IVA matter, including dealing with your creditors directly and monitoring your financial situation plus IVA repayments.  Your IP as your representative will first go to court to acquire an interim order stating that the creditors cannot take otherwise actions to bring the debt money from you. The interim order is a restriction against the creditors’ demand. While your IVA proposal is set up, your IP will contact the creditors to agree on the terms of the IVA proposal. Your IVA proposal contains the agreed monthly IVA contributions, determined considering your financial affairs and income & expenses. If more than 75% of your creditors favor the IVA proposal, the court will accept it and approve your IVA.; hence, your IVA is now in effect till its tenure ends. 
The IVA fees and costs depend on the Insolvency practitioner, the debt amount, and the expenses incurred during the IVA processing. The IVA fees consist of three different categories:  Nominee fee Supervisor fee Disbursements You pay a service charge for almost every item you use in your daily life. And since you are availing of IVA services from the respective authorities, it is vital that you have to respect the IVA fees and costs incurred. Moreover, you do not have to source extra money to pay these IVA fees and costs. They are included in the agreed monthly IVA contributions. So, while the IVA fees and costs do not amount as high, it is worth getting into an IVA. 
Many individuals these days are self-employed. So, when they look into various debt solutions, they tend to wonder, “Is IVA a good idea for a self-employed person?”.  One of the many criteria to get into an IVA is to have a regular and reliable source of income. If you are self-employed, it is natural that you have a good income source. To get an IVA approval, you just have to show that you have a decent earning and are left with enough disposable money after incurring your expenditures.  As a self-employed individual, opting for bankruptcy will permanently cease your business, and you will be left with no income source or job. But, by entering into an Individual Voluntary Arrangement (IVA), you will protect your assets and business, you can do your regular work, you can have a steady income source, and most importantly, you can repay your debts in regular intervals as monthly IVA contributions. It is a win-win situation. 
Is an IVA a good idea and worth it? Yes. Is it a good idea to take additional credit or loan during your IVA term? No. You enter into an IVA to get rid of your multiple debts and debtors. So, while you are in that process, why risk adding extra creditors by taking more loans? There is no prescribed restriction in an IVA that forbids you from taking other loans, but it is just not advisable. If you want to take a loan for whatever reason, you are permitted to take a loan of no more than £500. But, for more loan amounts exceeding £500, you have to get the permission of the IVA Supervisor or your IP.  If you take additional loans without informing the IVA Supervisor or your IP, they might cancel your IVA due to a breach of IVA terms and policies. 
Yes, you can cancel your IVA. To do so, you have to formally and legally cancel your IVA agreement with mutual consent from both your creditors and your Insolvency Practitioner (IP). If you want to cancel your Individual Voluntary Arrangement (IVA), there could be only two possible reasons: Your financial circumstances have made you incapable of producing further monthly IVA contributions.  Your financial circumstances improved significantly, and you can now make payments more than the agreed IVA contributions. So, you would not need any IVA agreements now.  While you want to cancel your IVA, remember that the benefit of creditors writing off outstanding debt money at the end of the IVA term is also terminated. After IVA cancellation, you will start making payments of the excess debt amounts along with additional interest and charges, if any. 
Is an IVA a good idea, a second one at that! If you previously had an IVA, you can indeed enter into a new IVA term again. Provided that your first IVA is completed with no defaults, or your first IVA failed before the end of its tenure due to faults of another party. Either way, you can put forward your new IVA proposal before your creditors and your Insolvency Practitioner. Your new IVA proposal will be in regards only if your current financial and personal circumstances are better off than before. To get approval for your new IVA proposal, you have to prove to them that your second IVA is credible, with good intention, and genuine. If neither party is satisfied with your new IVA proposal, it will be deemed rejected. 
An IVA, as it stands for Individual Voluntary Arrangement, will only include the entering individual’s prospects. Your IVA has no connection with your partner’s matter. Hence, your partner does not have to contribute a penny towards your monthly IVA repayments. But, the situation is somewhat different if there is any joint matter. In general, an IVA will include only your information. That is, if you are insolvent, but your partner is not. However, for joint assets like vehicles or home property, or sharing of ordinary household expenses, or part payments of house rentals and mortgages, the IVA proposal has to take those into account as well. For joint matters, you must disclose your partner’s information so that the creditors can ascertain how much each of you contributes. Disclosing your partner’s information also proves that your IVA proposal is genuine and reasonable to the creditors. 
If you do not want to violate any terms and policies of your IVA, you better not miss out on making your monthly IVA contributions. Because any payments that you miss will be added at the end of the IVA term, or your IVA might fail if your reasoning is found unsatisfactory. Ultimately, with IVA failure, your case may end up with bankruptcy.  A typical IVA usually lasts around five years. So, you get enough time to repay your debts in small amounts. However, considering that you face changes in your financial situation like lesser income, health issues, redundancy, etc., it is believable that you missed your IVA repayments. Therefore, it is advised that you consult with your IP regarding any vital financial matters as soon as you can. If the issue is quickly assessed, there might be an option for you to further break down the monthly IVA contributions into smaller ones. So, other than the unforeseen issues, “is IVA a good idea?”. Now you will have your answer. 

Last thoughts

When you think about an IVA as the ultimate debt solution, it might confuse you. But, an Individual Voluntary Arrangement (IVA) is a viable debt solution to handle your debt matters within a set duration. Just bear in mind that even after an IVA is over, the records will appear on your credit profile for about six years or more, starting from the date of its approval.

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