IVAs are tailored to individual circumstances, and so there is no way of predicting how much the monthly payments are likely to be. In general most IVAs involve paying at least around £200 per month.
In order to get an IVA proposal put together and have it accepted, it has to be clear that you can actually afford to make payments towards the IVA, and still maintain a reasonable standard of living.
When you explore using an IVA, you will need to consult an Insolvency Practitioner. The IP will need to undertake a thorough going over of your finances, and will establish your total debts, incomings, outgoings and assets before taking anything forward. They may suggest a number of different things to get your debts in hand, once of which is an IVA.
As part of an IVA you are required to try and pay as much as you can towards your unmanageable debts, although it is likely that you will end up paying back only a portion of what is owed. Your creditors will realise that they are going to receive more of your borrowing back than if you go bankrupt, and so will generally be open to using an IVA.
IVAs are not a way to avoid paying your debts back, but are rather a way of offering your creditors an alternative deal through which they will receive at least part of what you owe.
Your IP will help you to work out what you can afford to offer in terms of your IVA payments. It is imperative that you only agree to pay an amount that you can realistically manage, as if you fail to make the payments there is a chance that the IVA may fail.
If you find at any time during the IVA that you are struggling to keep to the payments, you should speak to your IP immediately. They may be able to renegotiate the IVA with your creditors on your behalf, or possibly to allow you a payment holiday, in which case the overall term of the IVA may be increased.
The payments may also change during the term, for example if your financial situation changes for either the better or worse. In this case your IP may recommend either increasing or reducing your monthly payments, but they will always talk through what is going to happen with you before any changes are made.
It’s difficult to say what you can expect to pay as part of an IVA, but your IP will make sure you understand fully what the options and implications of any deal are before anything is confirmed.
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