IVA - a real alternative to bankruptcy

Get expert help and advice with your IVA
Freeze interest and charges (once IVA is in place)
Have one agreed monthly payment tailored to you
Prevent or stop legal action - including bankruptcy

A practical solution to unmanageable debt

An IVA (Individual Voluntary Arrangement) could be the solution to your unsecured debt problems you thought you'd never escape from without declaring yourself bankrupt.

If you can't keep up with your monthly debt payments, an IVA could:

Reduce your monthly payments. Down to a level you can manage.
Reduce the total amount you have to pay. Leaving you with no further liability towards your unsecured creditors upon successful completion of your IVA.
Reduce the time you'll spend repaying your unsecured debts. Giving you a date in the future when you know they will be repaid.

An IVA is a legally binding agreement between you and your lenders. With them accepting the IVA, and you sticking to the terms, they're agreeing to accept tailored monthly payments, not to pursue any legal action against you (including trying to make you bankrupt), and to write off any outstanding unsecured debt at the end of the IVA. You agree to pay as much as you can afford for the time agreed.

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A light at the end of the tunnel

Perhaps the most important thing an IVA delivers is peace of mind, providing concrete answers to the questions you're probably asking yourself every day:

Will I be able to afford my monthly payments?
Yes - your monthly payments will be based on what you can realistically afford after paying for your essential expenses (such as your mortgage or rent).
Will I lose my home?
Unlike bankruptcy, in an IVA you are highly unlikely to be forced to sell your home.
Will my lenders take me to court or try to make me bankrupt?
No. As long as you stick to the terms of the IVA, they won't be able to.
Will I ever repay my debts?
Yes - and in an IVA, you'll know exactly when your unsecured debts will be repaid.

Subject to eligibility and acceptance. Debt write off applies to unsecured debts and only on completion of an IVA, alternative solutions may be offered. Homeowners may be required to release the equity in their property. Calls may be recorded for training and quality purposes and are usually free from UK landlines. Call charges from mobiles may vary.

IVA Key information and FAQs

What is an IVA?

Using legislation that is designed to help you repay your unsecured debt, an IVA is a formal agreement between you and your creditors which stops creditor demands. It enables you to repay your debts in single, tailored monthly payments over a fixed period (usually 60 months), as long as you stick to the terms.

How can an IVA help me?

Once set up and if you continue to pay the agreed amount each month you'll be protected from any further action being taken against you by your creditors.

If you stick to the agreement for the full term, your creditors agree to write off any unpaid unsecured debts.

How does the process work?

Talk to us, explain your situation, and we'll assess whether or not an IVA could be the right solution for you. If it is, we'll work with you to draw up an IVA Proposal - a formal offer showing your lenders what you would be able to pay.

Assuming this Proposal is approved, you'll simply start making your monthly payments (which will be based on your available income after you've paid all your regular expenses). As long as you fulfil your side of the agreement, any outstanding unsecured debt will be written off at the end of the IVA.

What will happen if I cannot meet my payments?

Debt Reducers will agree a repayment plan that best suits your needs. This should ensure you can meet your payments for the duration of the IVA, as not meeting your agreed payments can result in the IVA failing, putting you in a worse position, and even leading to bankruptcy. If your circumstances do change and you find that you are unable to meet your payments, we will try to renegotiate the terms of the agreement with your creditors.

What happens when the IVA is completed?

As long as you have fulfilled the terms of the agreement, your creditors will have no further claim against you and the balance of any remaining unpaid debts is written off.

Do all of my creditors have to agree to an IVA?

To approve your IVA, at least 75 per cent (by debt value) of the creditors who vote at a meeting, must accept your proposals. Even if they don't vote, or they vote against your proposals, each of your creditors will be bound by the agreement as long as it has been accepted by this majority.

Why would my creditors accept an IVA?

In accepting an IVA, your creditors will expect to get a better return than they would from any other reasonable alternative, and your payment proposals should demonstrate this to be the case. Your creditors will also benefit from the fact that your performance with the terms of your IVA will be monitored by a professional.

What will an IVA cost?

All the costs associated with your IVA are included in the payments you make into it. You don't pay anything extra. At Debt Reducers, we are committed to being totally clear, open and fair to both you and your creditors about our fees and any other costs that may be incurred.

Click here to read more about IVA fees.

Will an IVA protect my house?

One of the key benefits of taking out an IVA over bankruptcy is that the individual's home is safe from repossession. However, if you own your own home it is likely that you will have to release some of the equity in your property towards the total dividend.

What is the difference between an IVA and bankruptcy?

IVA

Duration: 5 years, in most cases
Effect on home: Very unlikely to force sale of home; will probably require release of some equity
Effect on career: Some companies may not employ an individual with an IVA
Publicity: Not advertised in newspapers, but will appear in the Individual Insolvency Register (which is publicly available)

Bankruptcy

Duration: Normally 1 year (payments can last for 3 years; in exceptional cases, a Bankruptcy Restriction Order may be granted, which can last 15 years)
Effect on home: Very likely to force sale of home
Effect on career: Bankrupt individuals cannot hold certain positions: e.g. company director, local government councillor or justice of the peace
Publicity: Bankruptcy will be advertised in newspapers.

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Expert debt advice from an award-winning organisation

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Key information & fees

For more information on the fees involved with each debt solution, please click here.