At ClearDebt we believe an Individual Voluntary Arrangement (IVA) is often a much better solution to becoming debt free than even a free Debt Management Plan from a charity like StepChange.
Our IVA infographic gives you the basics about IVAs and what is involved in arranging one. Take a look now.
IVAs vs Debt Management Plans
IVAs often take around half the time to complete compared with a Debt Management Plan with the same monthly contribution. All interest and charges will be frozen when you are in an IVA, as long as you make all the contributions. Interest, etc. may not necessarily be frozen in a Debt Management Plan. There are standard (protocol-compliany) fees for IVAs, but – as long as you make all your contributions – they come out of the amounts sent to your creditors and don’t affect your monthly contribution. Many debt management plans charge fees too.
Just like a Debt Management Plan, an IVA can be tough. In both cases you’ll pay most of what’s left after reasonable living costs for (usually) five years, but in a ClearDebt IVA you’ll typically only repay (on average) 51% of your debt, providing you make every monthly contribution (payment).
That’s not the pie-in-the-sky figure you’ll see quoted on some other websites, ClearDebt’s IVAs actually do write off half of our customers’ debt, or more, in more than half of the IVAs we do. In a Debt Management Plan you will be asked to repay all of what you owe and interest freezes are not guaranteed.
| IVA | Free DMP* | |
| Total unsecured debt | £10,000 | £10,000 |
| Monthly payment | £85.00 | £90 |
| No of payments | 60 | 111 |
| Total repaid | £5,100 | £10,000 |
| Possible IVA cash saving (£) | £4,900 | |
| Possible IVA time saving (months) | 51 |
*Assumes all interest and charges frozen. Data based on our customer database.
IVAs and DMPs will both affect your credit rating, which you can only start to rebuild once you have dealt with your debt (a process that will often begin sooner in an IVA). No debt solution comes without drawbacks.
Overcoming your debt problems
The first step toward dealing with debt is to recognise it’s a problem you can’t ignore, but that’s probably where you are now. Next comes doing something, getting advice and understanding how you can get back in control.
Thousands every year choose a ClearDebt IVA. Whatever you do now stop thinking about doing something and get advice.
Start dealing with your debt and you’ll sleep better; argue with your partner less and no longer fear the phone ringing (especially in an IVA, where creditors are bound by law to leave you alone).
There are other debt solutions too:
- Debt Relief Orders – for people with low debts and assets
- Bankruptcy – for people who can’t afford a long term repayment plan
- Scottish debt solutions – only suitable for Scottish residents, not for people who live in England and Wales or Northern Ireland
Find out more about a ClearDebt IVA
If you want to know whether an IVA could get you out of debt in five years you should call us* on 0800 019 2095 or 0161 969 2030 from a mobile or hit the button below, complete our contact form and we will call you back.
*All initial debt advice is provided by Abacus (Financial Consultants) Limited. They will talk you through all your options and will make you aware of free debt solutions too (you can find out more about free debt solutions from the Money Advice Service). Our advice call is free and we will give you a clear picture of all your options, with no pressure to take things further.
