Which debt can you pay off with an IVA?

An IVA is a formal as well as legally binding agreement that is usually conducted between you & your creditors to pay off all, or part of the debts over a certain period of time at a reasonable rate.

As IVA is a legally binding settlement process once the creditors have approved the terms & conditions of the IVA, they can't take further action against you, or even continue to bother you on a regular basis.

All contact will go through the debt management company or your Insolvency Practitioner (IP).

And, after making monthly payments towards the debts for a certain period of time with your creditors – generally 5 or 6 years – any leftover debt will be written off.

It means you'll no longer be liable for it, & can move on with your financial life.

As individual voluntary arrangement can be a positive approach to manage all the debts, but, in order to be eligible for this legally binding settlement process, you should meet the following criteria:

Have 6,000 pounds or more of unsecured debtBorrow money to 2 or more lendersLive anywhere in the Wales & EnglandHave a stable income & continuously be able to make monthly payment of at least 90 pounds per month

So, if all these criteria match with you, then you qualify for the IVA settlement process. This not only prevents the potential pressure from the people you owe money to, decreases the monthly payments, & writes off more than 81% of unsecured debt.

The majority of the unsecured debts, means the debts that aren't tied to an asset like home, can be easily included in an individual voluntary arrangement. This incorporates:

Credit cardsPersonal loansCatalogue and store card debtsCredit cardsOverdraftsElectricity, gas, and water bill arrearsCouncil tax arrearsIncome taxNational Insurance arrearsTax credit or benefit overpaymentsDebts to family and friendsPayday loansOther outstanding billsJoint debts

These are the debts that you can pay off with an IVA settlement process. And keep in mind, secured debt like Student loans, Mortgages, Hire purchase agreements,etc can't be paid off by the IVA. So before you move towards the IVA settlement process, make sure you verify what kind of debt you have.