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What is an Individual Voluntary Arrangement 'IVA'?

An IVA is a payment arrangement with your creditors.


It is a legally binding contract between you and your creditors with an agreement to pay back your debts over a set period.


The agreement is submitted to the High Court and your creditors are bound by it (subject to creditor agreement). Below we have listed out some of the pros and cons.

Pros

  1. You retain control
  2. Legally binding document
  3. No upfront payment
  4. Interest frozen
  5. No legal action can be taken against you by creditors bound by the IVA
  6. No nuisance calls/letters from creditors
  7. An approved intermediary to liaise with your creditors
  8. % of debt is written off
  9. Minimal advertising
  10. One monthly affordable payment and an end goal in sight

Cons

  1. Affect credit report
  2. Subject to unsecured creditor approval
  3. Registered on IVA register.
  4. If you breach your IVA, you come back to square one
  5. Advertised in Stubbs Gazette

Bankruptcy?

In some instances the best solution for an individual is to apply to the High Court to have themselves declared bankrupt. Bankruptcy is a Court order that effectively gives you a ClearSlate from your debt, with some exceptions of debts which cannot be written off in bankruptcy.

Pros

  1. No longer liable for debts
    (with the exception of debts not written off)
  2. No further contact required with creditors
  3. Cessation of any legal action
  4. Allowed to retain some assets
    (dependent on value)

Cons

  1. No control
  2. Assets at risk
  3. Cap on your earnings
  4. Newspaper advertising
  5. Bank accounts frozen
  6. Assets frozen
  7. Upfront costs
  8. Cannot be a Director of a Company during your Bankruptcy
  9. Impacts certain jobs

Other options for dealing with your debt

Debt Management Plan 'DMP'

A DMP is an informal agreement between you and your creditors for paying back unsecured debts.


With the agreement of your creditors you pay back an agreed monthly sum to an approved intermediary, this intermediary then makes the payments to your creditors.


We can put you in touch with an approved intermediary.

Pros

  1. One monthly payment
  2. No upfront fees
  3. Interest and fees frozen
    (subject to creditor approval)
  4. Doesn’t directly impact credit

Cons

  1. Payment in full can be slow
  2. Credit accounts will be closed
  3. No Court protection
  4. All creditors may not agree to participate

Debt Relief Order 'DRO'

A DRO is available to an individual whose debts are less than £20,000 in Northern Ireland and assets are less than £1,000.


Although we do not offer a DRO facility, if this is an option you feel you could benefit off, we can put you in touch with an approved intermediary.

Pros

  1. One off payment to set up (£90)
  2. Debts written off in 12 months
  3. Realistic & affordable
  4. Binds all creditors
  5. No further action to be taken by unsecured creditors

Cons

  1. Your details are registered on a public register
  2. Not eligible if you own your own home
  3. Can be revoked if you do not co-operate
  4. Cannot be a Director of a company whilst in a DRO
  5. Registered against your credit file

If you think any of these options are suitable for you, hit the "Lets Chat" button or Contact Us now.