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IVA and Unsecured debt

IVAs are designed for unsecured borrowing, including consumer debt such as credit cards or personal loans that are not secured in any way. IVAs can be used only for personal debt owed by individuals.

There are few restrictions on who can get an IVA, but in general they tend to be used for people with at least £15,000 worth of unsecured debt, and for debt that is owed to at least 3 different lenders.

Specifics

Whether or not you will be able to get an IVA is really dependent on the details of your own particular case. If you have borrowing that you feel is no longer within your control, you should speak to a debt expert for advice about how best to move forward.

If your situation is serious enough that you fear you may be under threat of bankruptcy, then you need to use the services of an Insolvency Practitioner. Your IP will look at your total unsecured debts, as well as your income, other outgoings and assets if you have any.

Payments

The other basic restriction on whether or not you will be able to get an IVA, is whether you can actually afford to make payments required. An IVA is basically a way of renegotiating your debts with your lenders, and offering to pay them a certain amount back over the IVA period. This amount will naturally amount to less than what is required by your current agreements with the lenders, but is a way for you to effectively settle the debts by paying at least a portion of what you owe.

It is typically the case that IVA payments are at least £200 per month, so if you cannot afford this, the chance of you getting an IVA proposal accepted are going to be reduced. Providing you can make the payments, while still affording yourself and your family a reasonable standard of living, then there’s a good chance you will be able to get an IVA set up.

If your IVA proposal is accepted by enough of your creditors, and you keep to the payments, your unsecured debt will be considered settled when the IVA period is complete. If you have other debts that are secured, such as mortgages or loans that are secured using an asset, you may still be able to use an IVA as one of a series of measures.

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Money Advice Service

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