If you have debt of over £10,000, then an Individual Voluntary Arrangement widely known as an IVA could be appropriate for you.
An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and the people and organisations you owe money to (creditors), other than your mortgage. An IVA is often a solution people consider when they feel there is no real prospect of paying off all of their debt. It’s worth noting that there can be negative consequences to IVAs and you can read more about these on our IVA FAQ page.
With the help of a licensed insolvency practitioner (IP), we help you work out the amount you can realistically afford to pay back over an agreed period of time – normally 5 years. If three-quarters of your creditors agree, your debt and all the future interest will be frozen at the time that the IVA proposal is agreed.
At the end of the agreed period any debt you could not afford to repay is written off provided you have kept up with the negotiated monthly IVA payments. Typically, in a ClearDebt IVA, you will repay around half of what you owe – depending on your circumstances up to 70% of your debt may be forgiven.
If you own a house that is worth more than the mortgage, then you are likely to be asked to make a contribution from that towards the end of the IVA. But you will not be asked to sell your home – the additional mortgage cost will be deducted from the IVA payment so you never pay more than you can realistically afford.
As long as you are confident you can maintain your regular monthly payment then an IVA could be the solution for you and you could be debt free in 5 years or less.
An IVA could allow you to:
- Avoid bankruptcy proceedings
- Reduce your monthly repayments by up to 70%
- Stop receiving hassle from your creditors
- Safeguard your property
- Only make one affordable payment each month
- Become free of debt within five years
Once you enter an IVA your creditors have to freeze interest and charges on your debt – and they can’t hassle you either (generally, the phone calls will stop well around two months into your IVA and any further correspondence you receive from your creditors should be forwarded to us to deal with). At the end of your IVA all your remaining debt is written off.