Can an IVA make me debt free (subject to terms and conditions)?
Obtaining credit when and IVA ends...
We receive a lot of calls and emails from the public asking; "Can an IVA make me debt free (subject to terms and conditions)?".
Please note that an IVA can only be set up by a Licenced Insolvency Practitioner (IP). An IVA can make people debt free but in addition it can avoid all the complications involved with bankruptcy and can protect an IVA client losing assets that are at risk, such as a family home.
What is an IVA (Individual Voluntary Arrangement)?
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors where you can come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you can owe then generally after 5 years your can be debt free (subject to terms and conditions).
Once a decision has been made that an Individual Voluntary Arrangement (IVA) can make you debt free (subject to terms and conditions). You will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount can be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your IP.
IVA can get you debt free (subject to terms and condtions) as it will be legally binding. As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of how much has been paid off.
Will an IVA let me be completely debt free?
The only debts that can be included in an IVA are unsecured ones. Provided you have included all of these in your arrangement then you can be completely free of unsecured debts (subject to terms and conditions) once the IVA has been satisfied. Any outstanding liability to the debts can be written off.
Any unsecured debts, which you fail to disclose, are not covered by the IVA, but it would not be in your interest to omit any debts from your proposal.
There are certain debts, which cannot be included in an IVA, such as:-
- Court fines for traffic offences,
- maintenance arrears such as the CSA,
- mortgage arrears/rent arrears
- secured loan arrears if you are still living in the property
- HP on your current vehicle.
All these are considered Priority debts and should be accounted for in your monthly expenditure.
Don't confuse an IVA with a Debt Management Plan as an IVA can not guarantee to make you debt free.
It is very important that consumers do not confuse an Individual Voluntary Arrangement (IVA) with a Debt Management Plan, which is not legally binding.
The Individual Voluntary Arrangement (IVA) team at Money Advice Direct are often surprised to see that few people actually know that the option of an Individual Voluntary Arrangement (IVA) even exists.
Most Individual Voluntary Arrangement (IVA) cases are based around one, affordable, monthly, payment, and make you debt free after a period of 60 months.
If you wish to discuss can an IVA make you debt free (subject to terms and conditions) and the IVA procedure and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.
IVA Guide
- What does it mean if my IVA is not approved?
- What are my options if my IVA is not approved?
- My IVA has been approved, what do I do next?
- My IVA has been approved subject to modification – what does this mean?
- How do I make my IVA contributions?
- My IVA proposal included the provision that I had to sell/realise other assets – what do I need to do?
- I am receiving letters and emails from companies offering me a better solution than an IVA - what are these solutions?
- What do I do if my monthly IVA contribution will be late?
- How do I deal with my creditors once I’m in an IVA?
- How do I deal with additional creditors now that the IVA has been approved?
- What happens if I miss an IVA payment?
- The bank has not transferred my IVA payment - what do I do?
- What happens if I do not inform my IVA supervisor that I can’t make the contribution?
- I'm struggling to make the monthly IVA payment what should I do?
- I've received a 'Notice of Breach' from my IVA supervisor - what does this mean?
- What happens if I’ve missed IVA payments or received a notice of breach and there is no solution?
- Is it possible to finish or settle my IVA early?
- How do I settle my IVA early?
- What is the process involved when offering an early IVA settlement?
- Why would I vary the terms of my IVA?
- What does the IVA variation process involve?
- What happens when the IVA variation process has been approved by creditors?
- What happens when the IVA variation process has been rejected by creditors?
- How does an IVA end?
- Will I receive any correspondence when my IVA has completed?
- If one of my debts has been excluded from the IVA, am I liable to pay the debt after the IVA has completed?
- When does a creditor debt claim have to be received by when completing an IVA?
- What happens if any additional debt claims is received during the IVA closure process?
- How do my creditors get their money in an IVA and what are the IVA dividends?
- Does the money in my IVA account earn interest and if so where does that interest go to?
- Do I get a report or certificate stating the IVA has been completed?
- How does an IVA fail?
- What is the effect of IVA failure or an IVA failing?
- What happens after an IVA fails?
- What are the costs of an IVA?
- Who pays for my IVA?
- What is the IVA process?
- Who takes care of my creditors?
- Will an IVA make me debt free?
- How an IVA benefits my creditors
- Lifestyle changes during an IVA
- Advice on living with an IVA
- Will creditors contact me?
- Will I my IVA fail?
- Completing an IVA
- Getting credit after an IVA
- Can an IVA make me debt free?
- How to boost my credit rating after an IVA?
- IVA vs debt management
- IVA vs bankruptcy
- IVA vs debt consolidation
- IVA vs administration orders
- IVA pros and cons
- IVA definition
- What is an IVA?
- Why choose an IVA?
- Who is suitable for an IVA?
- IVA benefits
- IVA stages
- False IVA adverts
- IVA compared to Bankruptcy
- IVA compared to debt management
- IVA compared to debt consolidation
- IVA compared to administration orders
- How the IVA got so popular and famous
- Things you should know and do before you start an IVA
- Will an IVA make creditor phone calls stop?
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]