When you’re applying for a loan, you may see it somewhere in the application – “We can’t help you at this time if you’re currently under an IVA” and wonder what that is.
In this month’s MoneyTalk we will explain what exactly one is and when you might need it.
IVA means an Individual Voluntary Agreement. It’s a legal agreement between a person and their creditors to pay back debts over a set amount of time.
An Individual Voluntary Agreement is more flexible than bankruptcy, allowing you to continue using a bank account. If Bankruptcy could mean that you lose your home or job, then an IVA maybe a better option for you.
If you owe money to more than one creditor and your debts total £10,000 or more, then this could be a suitable option for you. An IVA isn’t available to everyone. You’ll need to have a regular income and make sure you can afford the monthly payments.
Although they cover most types of debt, they’re however, mainly used for bank loans/overdrafts, store cards and credit cards. Debts with utility companies can also be covered.
If you have debt such as court fees then an IVA unfortunately won’t cover that, and you’ll still owe the money.
If you own your home or business, or if you’re at risk of losing your job, then this might be the best option for you. If you rent your home however, then bankruptcy might be a better option.
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