To answer the question ‘who is an IVA suitable for’ we must look at a few variables regarding IVA’s.  There are thousands of residents in the UK that get into an IVA without first understanding what it is and how it works.  They do know it can clear their debt, but at what costs?  We will seek to answer the question posed in order to help you find the best solution for your debt issues.

Three key factors for individual voluntary arrangements are going to be how much you owe, your income, and lifestyle.  A word of caution before you enter into any IVA talks.  You should seek professional advice from insolvency practitioners.  There are a number of insolvency practitioners who will offer free advice in the first few stages as to whether IVA’s are suitable for you and what you might expect.

Having offered our warning, let’s take a closer look at the three key factors mentioned above.  The amount of debt you owe needs to be considered.  In an IVA you are agreeing to pay the debt in 5 years.  Most of the time with IVA’s the debt you owe is lowered in the agreement to help you get it paid off, but this is not always true.  Some companies may not be willing to settle for less than the full amount.  You should be prepared to pay the entire amount that you owe.
Next the income you have is a factor. That income needs to pay for your expenses.  In other words if you make an agreement you need to be able to pay the IVA amount plus your normal living expenses such as food, gas, and utilities.  If your income will allow you to make the minimum payments for the IVA you may be suitable.

There is the third factor to consider.  Your lifestyle will determine the income you spend.  If you have trouble saving money or making payments based on what you make now or what you would owe to the IVA you may find the IVA too restricting.

A good rule of thumb is to see if you owe over 15,000 pounds, have three or more creditors, can make the minimum payment, and have regular income.  If the answer is yes, then you will find an IVA is a suitable option.

It is not the only option, but it does save you from bankruptcy and it often looks more favourable to creditors later on that you decided to make an agreement.  If you find the IVA is suitable you should act as early as possible.

The earlier you act the sooner you can get your debts under control and lower your stress.  Not everyone is suited to the individual voluntary agreement.  This is another reason why professional advice should be sought. 

You can ask all questions that you have before you enter into a deal that doesn’t seem right for you. A professional may be able to help you work with your creditors for a better arrangement.