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9 IVA Myths That You Should Know About

Applying for an IVA can be the right solution to your debt problems, but it all depends on your specific circumstances. It is important that you fully understand the implications of an IVA when making your decision. There are a number of misconceptions about this debt management solution. Some of these are detailed below, along with some facts to help you to decide if an IVA is right for you.

1. You will not be able to open a bank account

bank account with credit card

Although you may need to make changes to your bank account, that doesn’t mean you cannot open one at all. If you owe money to your bank through loans or overdrafts, they have the right to take money directly from your current account to pay towards the debt. This is called the right to offset. If this is the case, you will need to open a new bank account so your budget is not interrupted by the bank taking money from your account.

When you open a new account, you may not be able to have an overdraft facility as that is a form of credit. This should be discussed with your Insolvency Practitioner.

2. You will be forced to remortgage your property

If you are a homeowner, depending on your circumstances and the level of equity in your home, towards the end of the IVA, you may be expected to attempt to release a portion of equity by way of a remortgage for the benefit of your creditors. 

Upon considering an IVA, any obligations in respect of your property will first be explained and agreed with you before you enter into it. In many cases properties can be excluded from the terms of the arrangement where your circumstances demonstrate that your equity is either of a low value, or unlikely to be released by a remortgage.

In some cases where you are shown to have a significant level of equity, but a remortgage can not be achieved, creditors may agree to a longer IVA in lieu of this equity.

3. All creditors need to agree to the IVA proposal

When you put your application in, your Insolvency Practitioner will help you to write a proposal for your creditors, offering to pay a certain percentage of the debt and asking that the rest be written off. Your creditors will then decide whether they agree or not. But it’s a myth that all of them have to agree to the proposal for the IVA to go forward. 

Your creditors are not obliged to vote on your IVA proposal. Of those that do vote, only 75%, by value, must agree to the IVA for it to be approved and legally binding on all of them.

4. You have to tell your employer about an IVA

You only need to tell your employer about your IVA if it is specified in your employment contract. Some jobs, especially those that involve money handling or management, require you to disclose an IVA. This includes things like accountants, bank tellers, and legal services. Otherwise, you are not required to tell them.

Details of your IVA will be on the public insolvency register, but your employer will only see this if they actively go and search for your name.

5. You can’t obtain credit during your IVA

It is a standard condition of an IVA that you cannot obtain credit above £500 without the permission of your Insolvency Practitioner (the Supervisor of your IVA). 

Whilst subject to an IVA you are expected to live within a reasonable budget to ensure that you are able to pay your agreed IVA contribution. Therefore, you should think carefully before obtaining credit of any value as any subsequent repayments of this credit need to be affordable and within your budget. Credit obtained after the approval of your IVA will not be bound by the IVA and you will be responsible for repaying it separately. 

If you feel you need to apply for credit of a value above £500, it is important that you seek the consent of the IVA Supervisor before doing so.

6. An IVA will always be on your credit report

woman looking at credit score on computer

One of the reasons that people are cautious about entering into an IVA is that they think it will be on their credit reports forever and they won’t be able to borrow money in the future. It is true that an IVA is reported on your credit file, but it only stays on your report for 6 years from the date of approval; after that, it will be removed. 

7. Your IVA will fail if you miss a payment

It is important to make regular payments into your IVA, in line with the agreement. But it is a myth that your IVA will automatically fail if you miss one payment. If you are struggling to make the payments, you can speak with your Insolvency Practitioner who can work with you, and if appropriate approve a payment break. This gives you some breathing space to help you fix your financial situation. Typically if you become in arrears with your payments to the equivalent of three months (not including agreed payment breaks), this will be classed as a breach of the terms of the agreement, and your IVA is at risk of failure. Always talk to your IVA provider if you are struggling to make payment.

8. Not all interest charges or fees are frozen

Interest charges and fees make it far more difficult to get out of debt. One of the benefits of a formal arrangement such as an IVA is that interest charges and fees on your debts are frozen. Your creditors reserve the right to re-apply any owed interest and charges back to the debts owed if for any reason, your IVA fails. Once the IVA completes all outstanding balances will be written off.

9. You cannot save money with an IVA

When you take out an IVA, you will work with an IVA provider to produce a budget based on your income and expenditure. Your creditors expect you to offer all of your monthly disposable income towards the IVA. It may be difficult to put any money into savings at that point in time.

If your situation changes for the better during the IVA, one of the key principles of the arrangement is that both you and the creditors feel the benefit of this improvement, so you would get to keep half of any increase in disposable income. You’re free to utilise these funds as you see fit.

Need more IVA advice? Contact us today

If you want more information about the specifics of an IVA, or some advice about whether it is the right option for you, Swift Debt Help can give you some guidance.

Fill out the contact form, email us, or give us a call and a member of our expert team will give you the advice that you need.

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May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

How To Apply For An IVA

An IVA is a debt management solution that can allow you to make affordable payments over a fixed period, typically 5 or 6 years. At the end of your IVA, the outstanding balances are written off and you will be debt free. This page will give you an overview of what an IVA is, how it works, and how you can apply for one.

What is an IVA?

An IVA (Individual Voluntary Arrangement) is a legal agreement between you and your creditors. It’s a way of paying back some or all of what you owe over a fixed period, usually 5 years. You pay back a certain percentage of your debt in monthly instalments. Your creditors then write off the rest at the end of the agreed period.

Once your IVA is in place, your creditors can’t take any further action to recover money from you, so you are protected against bailiffs. Interest and charges on the debts will also be frozen.

At the end of the IVA, your debts will be paid off and your creditors cannot chase you for the remaining balance.

How does an IVA work?

An IVA allows you to pay back your debts in affordable, usually monthly, instalments. When you apply for an IVA, you will work with an Insolvency Practitioner and they will start by assessing your finances. Once they have calculated what your disposable income is and what you can realistically afford to pay back (usually over the course of five years), they will help you draft an IVA proposal for your creditors. 

This proposal offers to pay back a certain percentage of the debts in monthly instalments. It is then up to your creditors to vote on whether they accept the offer or not. If at least 75% (by value) of voting creditors agree, the IVA is approved and you start making payments to your Insolvency Practitioner. You typically make a single payment each month. Your Insolvency Practitioner is then responsible for making payment to your creditors on your behalf. This is a lot easier to manage than multiple debts that are payable at different times of the month. The fees and associated costs of an IVA are incorporated into your affordable monthly repayment, and they are agreed with your creditors at the time the IVA is approved.

During the IVA, you will be subject to certain restrictions. For example, you cannot borrow more than £500 without permission from your Insolvency Practitioner. You must also agree to keep your Insolvency Practitioner up to date with any changes to your circumstances and understand that it is possible that your repayment could go up or down as a result of this.

As long as you make your IVA repayments on time every month, it will end after the agreed term and the remaining debt will be written off. However, if you miss payments, it can be extended. 

What debts are covered by an IVA?

Tipped over money jar with coins pouring out of it

The majority of unsecured debts are covered by an IVA. Debts that are covered include:

  • Personal loans (including payday loans)
  • Credit cards
  • Overdrafts
  • Utility bill arrears
  • Council tax arrears
  • Income tax and national insurance arrears

Although most debts are covered by an IVA, there are some exceptions. Debts that are not covered by an IVA include: 

  • Student loans 
  • Child support arrears
  • TV licence arrears
  • Magistrates’ court fines
  • Social fund loans
  • Court ordered maintenance arrears

How do I apply for an IVA?

If you want to apply for an IVA, you need to get some expert advice first. In some cases, it can be an effective method for writing off debt and helping you manage your finances but it is not always suitable. Depending on your personal financial situation, you may need to consider alternatives. At Swift Debt Help, we can advise you on whether an IVA is the right choice for you. 

The next step, if you decide to go ahead with an IVA, is to contact an Insolvency Practitioner. Your application must be submitted via an Insolvency Practitioner that has been authorised to set up IVA’s. They will talk through your finances with you and assess your situation before creating a proposal with you for your creditors.

What is the IVA application process?

IVA process - 'steps' highlighted with circle

Assessing your finances

The first step in the IVA application process is an assessment of your finances by your Insolvency Practitioner. They will need to see as many details as possible including bank statements, payslips, and bills. They also need information about your assets. 

This gives them a full picture of your financial situation and how much disposable income you have available to pay your debts.

Writing a proposal for creditors

Using all of the information that you have given them, your Insolvency Practitioner will help you to create a proposal for your creditors. The proposal will offer to pay back a certain amount of your debt in monthly instalments. The figure will be based on what you can afford to pay each month.

The proposal also outlines what is to be done with your assets. If you own a property you will not be required to sell it, however there may be a requirement to attempt to release equity if you are able to towards the end of the term of the IVA.

As well as the proposal, your Insolvency Practitioner will create a report for the creditors giving detailed information about your finances, details of the IVA and reasons why they believe that an IVA is beneficial for all parties involved.

Creditors make their decision

Once the proposal is ready, your Insolvency Practitioner will invite your creditors to attend a virtual meeting, providing them with an opportunity to review the terms of the proposal before voting on it. You may also attend this meeting if you wish, but this is not necessary.

At least 75% (by value) of voting creditors must vote in favour of the IVA for it to be approved. If you get enough votes, all creditors will be legally bound by the IVA, including those that voted to reject it. The value of the debt that you owe to each creditor determines their influence in the vote. For example, if all your creditors voted, and you owe 50% of your debt to a single creditor, their vote counts as 50% of the overall vote.

In some cases, creditors may ask for changes to be made to the terms of the IVA as a condition of them accepting your proposal. These are known as “modifications”. If this happens, you will be asked to confirm your agreement to the changes before the IVA goes ahead. You do not have to accept any proposed modifications, but it may result in the IVA not being approved if you don’t. 

The entire IVA application process usually takes around three weeks. Hopefully, the creditors vote in favour of the IVA and you can start making your monthly payments.

How do I qualify for an IVA?

An Insolvency Practitioner will determine whether an IVA is an appropriate option for you based on your circumstances, but ultimately it is your creditors’ decision whether or not your IVA will be approved. Typically, you must owe over £5000 to at least 2 creditors. Crucially, you must be insolvent, meaning that you are unable to make the monthly repayments on your debts even though you have a regular income.

As long as you meet these criteria, you can start an application for an IVA. However, your Insolvency Practitioner will discuss other options with you as well. Once the proposal has been submitted, it is down to your creditors to decide whether they accept it or not.

What if my IVA is rejected?

rusty no entry sign

If your IVA is rejected, in simple terms your situation remains the same as it did before you put the application in. You still owe money to your creditors and if you stalled contractual repayments to your creditors while you were making your application, you may have additional charges to pay. 

You can put another application in, but this is not advisable unless your situation has changed. When an IVA proposal is rejected, the reasons for the rejection are usually provided. So you should bear these in mind when considering another application. If it is still likely to be rejected, it is unlikely your Insolvency Practitioner will agree to put a further proposal forward on your behalf. There are however no restrictions on how many IVA applications you can make, and it is possible to get an IVA approved in the future even if you have had one rejected in the past. The Insolvency Practitioner will always make an assessment as to the likelihood of creditors accepting your proposal, they will advise whether they recommend making another application. 

If you aren’t able to get your IVA approved, you may need to consider your alternative options, such as bankruptcy or a debt management plan.

Alternative solutions

There are a number of alternative debt solutions available to you if your IVA is rejected. At Swift Debt Help, we can provide you with useful information on these alternative solutions.


Declaring bankruptcy can be an effective way to achieve debt write off. Your non-essential assets and disposable income are used to pay off as much of the debt as possible. Typically you will be automatically discharged from the bankruptcy after a year, however if you are required to make payments out of your income (known as an “Income Payments Agreement” or “Income Payments Order”), then this obligation can remain for up to three years. After the bankruptcy is finished, the remainder of your debts will be written off. You have less protection for your assets than you would with an IVA. It costs £680 to petition for your own bankruptcy.


A DRO (Debt Relief Order) pauses all of your debt repayments and interest for 12 months. It is only appropriate for individuals with very low disposable income, and has other strict criteria that must also be met in order to qualify. To apply for a DRO you must submit your application via an authorised debt advisor. It involves a one off cost of £90 to have your application considered by the Official Receiver. If a DRO is granted, if your situation has not improved at the end of the 12 months, your debts will be written off.

Debt Management Plan

A Debt Management Plan is an informal debt solution, meaning that it is not legally binding. If you are unable to afford your current repayments, you can negotiate a reduced rate with your creditors. You will not write off any of the debt, but it does make it more manageable. This option could help you avoid some of the negative effects that formal solutions have on your ability to borrow money in the future.

Need further help?

If you are struggling with debts that you cannot pay and you don’t know what to do, get in touch with Swift Debt Help today. Our expert advisors can talk you through IVA’s and other debt management solutions to help you find a way to regain control of your finances.

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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

7 Benefits of an IVA

An Individual Voluntary Arrangement can be an effective debt solution if you are unable to afford your monthly repayments to creditors. You will make an agreement with your creditors, based on your circumstances at the time, to make affordable payments, over typically a 5 year period with any outstanding balances being written off at the end of the IVA. 

Understanding the benefits of an IVA will help you decide if it is the right debt solution for you. Here are seven IVA advantages to consider.

1. What you repay is based on your affordability

paying using a credit card

You will work with an Insolvency Practitioner when entering into an IVA and they will negotiate with your creditors. They assess your finances to work out what you can afford, and then make an offer to your creditors. Usually, your IVA will offer them a return that is lower than the total debt owed. However, the amount you repay is still likely to be higher than it would be if you declared bankruptcy.

If your Insolvency Practitioner thinks that an IVA is the right option, they will help you to draft your proposal which will contain a reasonable offer that is beneficial for you and your creditors. Insolvency Practitioners work with creditors every day, and would only agree to propose an IVA if they believe it has a reasonable chance of being accepted by them.

2. Manageable monthly repayment

monthly payment

The monthly payments you make are calculated based on your income and financial responsibilities at that point in time. In other words, you only pay what you can realistically afford each month, making IVA’s an affordable debt solution. You will be able to clear your debt while also meeting your other financial obligations. During the course of an IVA, your circumstances may change. If this happens, it is possible for your payments to go up, or down, depending upon your affordability at the time. 

3. Creditors can no longer contact you


For many people, being chased by creditors is incredibly stressful and makes dealing with debt much harder. But once you enter into an IVA your creditors can no longer demand payment from you. They are also barred from taking legal action against you (filing for a County Court Judgement, for example). The agreement is legally binding, so you have protection against creditors for the duration of the IVA.

Often, you will still get contact from creditors in the first few months of your IVA. This is simply because they have not updated their records yet and their system still shows that you owe money. If this happens, simply inform them that you are in an IVA and then direct them to your Insolvency Practitioner. 

4. Interest and charges on unsecured debt will be frozen

cash withdrawal from atm

Some people may find themselves trapped in debt because their monthly payments are only enough to cover the interest on the debt. The principal amount never goes down, so they are unable to clear the debts. Charges for late payments only increase the amount of debt, making it even harder to manage.

When you enter an IVA, all interest and charges on unsecured debt will be frozen. This stops the debt from increasing further during the IVA. 

5. Have an end in sight

end sign

An IVA is proposed to last for a set time period, typically for five or six years. During that period, you make your monthly payments, comply with the terms of the arrangement and at the end of it, any remaining debt is written off. An IVA gives you a clean slate and you will be free from any unsecured debts included within it, so you can start rebuilding your finances. If you fail to make monthly payments on time, the IVA may be extended and you will be paying for more than the originally proposed term. However, as long as you meet your obligations, once the fixed period is over, you are free to move on with your life without debt.

6. Your assets are protected from bailiffs

assets protected

If you’re not in a formal debt solution and you fail to make your payments, your creditors can file a County Court Judgement against you. If granted, this is one step closer to them being able to send bailiffs to collect on the debt. 

Once you enter into an IVA your assets are protected. In some cases, assets will be included in the IVA, so they are sold and the money is paid to your creditors. However, you can exclude certain assets like your car if it is of reasonable value and required for day to day living. The majority of your possessions will automatically be excluded already and you will not have to sell your home, though you may be asked to remortgage to release equity. 

Once the IVA begins, you have legal protection and your creditors can no longer take action against you, including sending bailiffs to collect on the debt.

7. You will receive debt support throughout the process

holding someone's hand to support them through debt problems

When you enter into an IVA, you work with an Insolvency Practitioner who can give you advice and support. You will devise a household budget in order to work out your disposable income and ensure this is affordable. If you have concerns about the IVA or how to proceed once it is finished, somebody will always be on hand to answer your questions. Having that support makes a big difference, especially if you are struggling with large debts.

There are some downsides to an IVA you should consider, such as an impact on your credit score. You are also subject to certain financial restrictions during an IVA. But if you are having difficulty paying your debts and your creditors are chasing you for the debt, there are a lot of benefits to an IVA

Get in touch with Swift Debt Help today if you are struggling with debts. We can give you expert advice and talk you through the different debt solutions that are available to you.

Request a Debt Assessment

May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

Can You Get a Mortgage with an IVA?

Getting a mortgage with an IVA (Individual Voluntary Arrangement) is possible, but there are challenges to consider. If you enter into an IVA, it is likely that you already have high debt levels and poor credit. This will be taken into consideration when applying for loans. Restrictions on borrowing during the IVA will also cause potential problems. However, it is not impossible to get a mortgage.

This article contains important considerations you need to take into account when considering obtaining a mortgage whilst on an IVA.

Getting a Mortgage with an IVA

Person holding keys for house

During an IVA, your debts will effectively be consolidated into one single payment. You will then enter into a payment plan, which you must adhere to for the duration of the IVA. There are also financial restrictions you must follow during the IVA, especially where borrowing is concerned.

If you want to borrow more than £500, you need written permission from your Insolvency Practitioner. So, even though you can technically get a mortgage, you need to seek their approval first.

It is important to discuss this with your Insolvency Practitioner beforehand and explain your reasoning for getting an IVA mortgage to them so they can advise you.

Will I need a specialist mortgage lender?

If you do decide to apply for a mortgage during your IVA, you will most likely need to work with specialist mortgage lenders. These lenders typically offer a wider range of products and can work with people who are in an IVA or previously have been. However, they will come at an extra cost in terms of fees and interest rates, and you will need a larger deposit.

Standard lenders will not consider your application, in most cases, so you will be limited in terms of loan options and you will need to work with more specialist lenders.

How does an IVA affect a mortgage application?

empty application form

An IVA can have a profound effect on the mortgage application process. Bear in mind that your main responsibility is paying into your IVA and clearing your debts. The restrictions exist to ensure that all available money goes towards the IVA. If you do obtain a mortgage, you may first need to agree to attempt to release equity from it towards the end of the IVA

There are also several factors that will affect the application process and dictate how much you can borrow and what interest and fees you will pay. Consider the following:

Disposable income

Lenders will consider your disposable income when deciding whether you can afford a mortgage or not. However, the majority of your disposable income must go towards your IVA. This will affect how much you are able to borrow. If you are currently paying rent, then the amount you are paying for rent each month is likely to be the best indicator of what will be affordable to you in terms of a mortgage repayment.

Credit report

An IVA is listed on your credit report and it can have a severe negative impact on your credit score. Lenders will do a credit check to determine your risk as a borrower. Having an IVA on your report will work against you and some lenders are far more likely to reject your application altogether.

Unaffordable rates

The likelihood of your mortgage application being rejected is much higher when you have an IVA. However, even if you are accepted, it is likely to be a comparatively expensive mortgage with high interest rates because of your poor credit score. Currently, the majority of your excess income is going towards your IVA. Paying an expensive mortgage puts more pressure on you and makes it much harder for you to manage your finances. In many cases, you will find that you are unable to afford a mortgage even if you do qualify for one from a specialist lender.

How to get a mortgage with an IVA

Row of little red houses

You may decide that getting a mortgage is the right option and you are able to afford it. In that case, the first thing you need to do is get permission from your Insolvency Practitioner. If you apply for credit over £500 without permission, you breach the terms of your IVA you put yourself at risk of the IVA failing, leaving you to deal with the demands of your unsecured creditors directly once again.

When you ask for permission, your Insolvency Practitioner will consider:

  • If the mortgage is necessary
  • How long it will take you to repay
  • Whether you can comfortably pay it alongside your IVA payments

Bear in mind that they can deny your request if they don’t feel that it is the right decision. They will be particularly mindful of whether it is to the benefit or detriment of the IVA creditors to allow you to obtain the mortgage.

If they do approve in principle, you need to start comparing deals. Make sure you weigh up a lot of options to find the best interest rates and deposit amounts. Tread carefully where specialist lenders are concerned.

When you think you have found the right deal, the insolvency practitioner will need to know the amount of the monthly mortgage repayment, in order to satisfy themselves that it is acceptable, before confirming their permission.

Applying for a mortgage after an IVA

Getting a mortgage after an IVA could be a far better option than applying while you are still subject to the arrangement.

Once you have finished making the payments and you are released, you are no longer bound by restrictions, so you can borrow normally without needing permission. You also have full control over your disposable income and no debts to pay, so you are likely to be able to demonstrate a higher disposable income and affordability, which should broaden your borrowing options.

However, the IVA still remains on your credit report for six years and it has a negative impact. Lenders may give less relevance to the IVA as time goes on. So, if you wait a few years, you stand a much better chance of getting a favourable interest rate than you would if you applied immediately after your IVA.

Giving yourself some time also allows you to build your credit rating and save a larger down payment, so when you do eventually apply, you can get a more affordable mortgage. Keep in mind that a rejected application will damage your credit score, so your likelihood of acceptance should be considered carefully before making an application.

Find Out Whether You Could Be Better Off With An IVA.

Am I Eligible For an IVA?

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

What Are The Implications Of An IVA?

An Individual Voluntary Arrangement (IVA) is a formal debt solution that typically allows you to make repayments that you can afford, over a set period, with any outstanding debt written off at the end of the agreement. 

However, every case is unique and before making any decisions, it is important to consider the wider implications of an IVA and whether other options like bankruptcy may be a better alternative. There are a number of ways that an IVA will impact your life and your financial situation.

How will an IVA impact your job?

Man walking to work with briefcase in hand

Usually, an IVA will not impact your job, but there are important exceptions. If you work in a position of financial responsibility (bank clerk, accountant, solicitor, etc) it is expected that you uphold a certain level of personal financial stability. So, in this case, an IVA may affect your job and you may not be able to continue in that position until it has finished. Some other positions of responsibility, like working for the police and prison service or the fire brigade, may be affected. If you own a business, you can continue operating. However, it will be harder to find credit. 

Before entering into an IVA, speak to your employer and review your employment contracts to determine whether you are affected or not.

Does an IVA impact your future income?

Calculating income on smart phone

This is dependent on your career plans. If you want to enter one of the careers listed above, it could be a problem. Otherwise, it should not impact your future income. 

However, if you are planning to sell assets during your IVA, you may have to put some or all of the income from the sale into debt payments.

How will an IVA affect your possessions and assets?

Five pound note rolled up

When you enter into an IVA, you must declare all of your assets to your Insolvency Practitioner who will work with you to draft your offer of repayment to creditors (your ‘Proposal’). All of your significant assets will be listed within the proposal as creditors need to see an accurate reflection of your financial circumstances in order to make a decision as to whether your offer seems reasonable and fair to them. There is no legal requirement for you to sell or surrender any particular assets of value as part of your offer, however, generally speaking, creditors are unlikely to agree to write off debt for you if they believe your assets are of excessive worth which could be sold to help repay the debt.

If you are a homeowner, and have equity available in your property, it will be expected that your proposal will include your agreement to attempt to release a portion of this towards the end of your IVA. The inclusion of home equity, as well as any other significant assets, will be discussed and agreed with you during the process of putting your IVA proposal together.  

Can you get a mortgage with an IVA?

Man holding house

Getting a mortgage during your IVA can be difficult. You must seek approval from your Insolvency Practitioner if you want to borrow more than £500. 

An IVA (as with any form of insolvency) is recorded on your credit file for 6 years from the date it is approved, and is publicly available information as it is disclosed on the Insolvency Register. A mortgage lender or broker will assess your application against lending criteria. The fact that you have been declared Insolvent could affect whether a mortgage is available to you, or the rate that will be offered.

How long does an IVA stay on a credit file?

An IVA stays on your credit report for 6 years from the date of approval. 

Does an IVA affect financial mis-selling compensation?

In many cases, as part of your proposal to creditors, the Insolvency Practitioner will agree to pursue potential claims on your behalf. Any money that you are awarded is considered an asset of the IVA and it will help repay the creditors in the IVA.

What other restrictions does an IVA have?

An IVA has other restrictions that you should be aware of when making your decision: 

  • Missed payments – you must maintain payments towards your IVA. If you miss the equivalent of 3 monthly payments without any agreed payment breaks being sanctioned by the Insolvency Practitioner, then you will be in breach of the terms of the arrangement. If this is not remedied, your IVA may fail. Any payments that are agreed to be missed, still need to be paid at the end of the arrangement meaning that it could last longer than initially proposed.
  • Taking out additional credit – You are unable to take out any additional credit, of more than £500 without the prior consent of the Insolvency Practitioner. This includes use of catalogues and overdrafts .
  • Budget restrictions – When proposing your IVA, you are required to put all of your surplus income towards debt payments, and live within a budget. During the lifetime of the IVA if your financial situation improves, you are required to disclose this to the Insolvency Practitioner and your payments may increase.

Is An IVA Worth It?

There are a lot of IVA advantages to consider. You can write off a significant portion of your debt, in some cases, and you will avoid high-interest payments. Ultimately, it allows you to clear your debts and secure your financial situation. 

On the other hand, you must consider the IVA disadvantages when weighing up your options. It does impact your life and finances in a number of ways and you should think carefully about whether you are willing to deal with the implications. 

In the end, it all comes down to your own personal financial situation. At Swift Debt Help, we can advise you on whether an IVA is the right option for you and take you through the alternatives if it is not. Fill in our form below to find out if you are eligible for an IVA.

Find Out Whether You Could Be Better Off With An IVA.

Am I Eligible For an IVA?

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.