Is An IVA Worth It in 2024? - Check List & Pros and Cons

We will analyse the security, flexibility, restrictions and possible risk of an IVA, all contained in a practical checklist to make it easy for you to make the best decision.

Furthermore, we’ve also listed the top 4 platforms through which you can connect with a FCA-approved third party debt advisor who can guide you even further, to let you see if you should set up an IVA or not.

Come with us to find out if an IVA is worth it and how our recommended platforms can help you to get the advice you need right now.

Top 4 Platforms for Obtaining IVA Advice from Third Party Debt Advisors in 2024

If you’re interested in obtaining specialised IVA advice from a third-party debt advisor, then our recommended top 4 platforms will be able to help you:

1. Viva Debt Help: Best Platform for Getting IVA Advice from Third-Party Advisors
2. 123 Debt Fix: Best for Contacting IVA Third-Party Advisors When Highly Indebted
3. Help My Debts Pro:  Best for Business Owners with Personal Debt for Contacting Third Party IVA Advisors
4. Debt Nurse: Best for Contacting Third- Party IVA Advisors When You Have Multiple Types of Debt (Personal Loans, Payday Loans, Credit Cards, etc.)

If you need more information about each one of our recommended platforms for IVA advice, then make sure to check our individual reviews below.

Viva Debt Help: Best Platform for Getting IVA Advice from Third-Party Advisors

Pros:

• Experienced network of third-party advisors who can help highly indebted individuals
• Suitable when you owe money to different types of creditors
• Specialised IVA advice from seasoned third-party advisors
• Friendly and professional third-party IVA advisors
• Fast and easy application
• Fast calls
• They can connect you with an Insolvency Practitioner

Cons:

• Viva Debt Help does not guarantee any type of results
• Your credit rating might be lowered

Viva Debt Help is considered as the best platform for getting IVA advice from third-party advisors authorised by the FCA because it has the fastest response time, a vast network of advises specialised on helping different types of customers, and they can even connect you with an Insolvency Practitioner to set up an IVA in case you want to take the next step.

123 Debt Fix: Best for Contacting IVA Third-Party Advisors When Highly Indebted

Pros:

• Experienced third-party IVA advisors for individuals who owe over £10,000+
• Friendly third party advisors
• Fast calls
• Easy application
• They can connect you with an Insolvency Practitioner

Cons:

• 123 Debt Fix does not guarantee any type of results
• Your credit rating might be lowered

If your debts are significantly big, for example £10,000, £20,000 or more, then you should consider contacting a third-party IVA advisor through 123 Debt Fix. Because this website has a network of debt advisors specialised on helping people who are highly indebted and need advice about getting an IVA or exploring other debt solutions.

Help My Debts Pro:  Best for Business Owners with Personal Debt for Contacting Third Party IVA Advisors

Pros:

• Qualified third-party IVA advisors for business owners and self-employed individuals
• Professional third-party advisors
• Suitable for business owners and self-employed individuals who are highly indebted
• You can get further help from an Insolvency Practitioner to set up an IVA

Cons:

• Advisors can take up to 1 day to call you
• Your credit rating might be lowered

If you are a business owner or self-employed and you owe a significant amount of debt to several creditors, then you should contact a third-party advisor through Help My Debts Pro. Since they work with FCA-authorised debt advisors who focus on helping business owners to decide if an IVA is their best option, it’s an excellent choice for you right now.

Debt Nurse: Best for Contacting Third- Party IVA Advisors When You Have Multiple Types of Debt (Personal Loans, Payday Loans, Credit Cards, etc.)

Pros:

• Qualified third-party IVA advisors when you have multiple types of unsecured debts
• Friendly and professional debt advisors
• Easy and fast application process
• They can connect you with an Insolvency Practitioner

Cons:

• Third-party advice does not guarantee any results
• Your credit rating might be lowered

Getting into an IVA when you have multiple types of debt, especially if it’s a significant amount such as £10,00+ can be tricky because you need to pay special attention to the finer details. Fortunately, the third-party debt advisors at Debt Nurse can guide you into the right direction since they’re specialised in helping people who owe money to different types of creditors.

How to Apply for IVA Advice

If you’re ready to get IVA advice in order to start managing your debts the right way, then here’s how you can get it through our recommended platforms:

1. Select a platform for getting third-party IVA advice from our ranking
2. Click on the name of the platform to visit their website
3. Fill out the application form with all requested information
4. Wait for a third-party IVA debt advisor to call you
5. Receive no obligation advice about getting into an IVA and how you can set it up with a recommended Insolvency Practitioner (IP).

Since we’ve only picked the top platforms in the UK for contacting third-party debt advisors for IVA advice, you can expect to receive a call in record time. Just fill out your application form now to get the advice you need to make the best decisions for your finances today.

Is An IVA Worth It For You? - Checklist

We will help you to quickly find out if an IVA is worth it for you with this straightforward checklist - here’s what you need to consider before entering into this debt solution with your creditors:

1. Do you owe more than £5,000 to multiple creditors?

If you owe more than £5,000 to two or more creditors, then getting into an IVA might be a good idea. This way you save money in fees paid to the Insolvency Practitioner, and you can take advantage of an IVA by writing off a significant percentage of your debts at the end of the agreement.

Because IVAs were specifically designed for highly indebted people who owe money to multiple creditors. If this is your case, then now you have a solid motivation to get into an IVA.

2. Can you afford to pay at least £100 per month or to make a lump sum payment?

An IVA will require you to make monthly payments of at least £100 (this will vary depending on the total sum of your debts), or to make a lump sum payment that is big enough to encourage creditors to accept it. If you can afford any of these two options, and if you’re highly indebted, then getting into an IVA might be the best option for you right now.

3. Do you owe money to creditors in the EU?

If you principally owe money to creditors in the EU, then it might not be a good idea to get an IVA. Because this solution might not cover these debts, and such creditors might still be able to take legal action against you, as well as keep calling and messaging you about your unpaid debts. In this case, it’s better to consult with a third-party advisor through our selected platforms to determine the best course of action for your current situation.

4. Is your financial situation not likely to improve in the short to medium term?

If your chances of securing a better position, getting a new and better job, or simply increasing your income in the next few months or years are low, then an IVA might be a good idea. Because since the payments can be as low as £100 per month (while your financial situation justifies it), you can write off a big percentage of your debts at the end of the IVA.

However, if you are actively working on increasing your income or getting a better job with a higher salary, then you should explore other options such as a DMP or a Debt Relief Order. We encourage you to contact a third-party debt advisor through our recommended platforms to get advice on this to make the best possible decision.

5. Are you going to receive your share of an inheritance during the next 5-6 years?

Most IVAs will contain the infamous “Windfall Clause”, which states that any unexpected significant income that you receive such as obtaining your share of an inheritance, winning the lottery or selling a home, will go into paying the IVA. However, this will not reduce your monthly payments and will not reduce the length of the agreement.

Therefore, if you’re going to receive your share of an inheritance while an IVA is still active, then you should consider getting into a DMP first. However, we recommend you to contact a third-party debt advisor through our selected platforms to get better advice regarding this situation.

6. If you own a home, are you willing to borrow against it or to extend your IVA for another 12 months?

If you own a home, then this might affect the terms and conditions of the IVA. If the equity of your home is greater than £5,000, then you’ll have to borrow against it to obtain a lump sum payment that will go into your IVA. If it’s not possible for you to get a loan and you still want to get into an IVA, then you can opt for extending its duration for an extra 12 months.

Getting into an IVA if you own a home can be a tricky situation because there are several variables you need to consider such as your retirement age, the total debt you owe, the length of the new loan, etc. A third-party debt advisor can bring you a detailed analysis about your situation to help you make a good decision.

7. Do you currently receive SMI payments?

If you are currently receiving SMI payments to support you for paying mortgage interest, then getting into an IVA might not be the best idea. Because once you get into this agreement with your creditors, the SMI payments will stop. You need to compare the pros and cons of this decision in order to determine the best course of action.

8. Are you comfortable paying IVA fees?

The monthly payments that you make will be distributed amongst your creditors, but the Insolvency Practitioner (IP) will retain 15-18% of every repayment. If this situation does not bother you, and you’ve already seen that an IVA might be a good solution for your current situation, then you should consider setting up this agreement with your creditors.

9. Are you an accountant, solicitor or do you work in the law or banking industries?

Getting into an IVA does not mean that you will get instantly fired, but it can complicate your employment if you work as an accountant, solicitor or in the law or banking industries. Your employer won’t know that you are into an IVA unless you approve a financial check, or if you search the public Insolvency Register.

On the other hand, if you are trying to get a new job in any of these industries while in an IVA, then it might be harder for you to land a position, because chances are your applications will be rejected.

10. Are you planning to take out a new loan within the next 5-6 years?

An IVA will stop you from taking out a new loan or credit product (such as a credit card) during the duration of the debt solution. And you also need to consider that it will show up on your credit file for 6 years, making it harder to get approved for a loan even if you’ve successfully finished the IVA.

What is the Ideal IVA Profile?

After answering these 10 questions, you should already have an idea if an IVA is worth it for you. However, if you still need more information, then here you have the ideal type of profile that should get into an IVA:

1. You owe more than £5,000 to multiple creditors
    
2. You can pay at least £100 per month or you can make a lump sum payment
    
3. You don’t owe money to EU creditors
    
4. Your financial situation is not likely to improve within the next 5-6 years
    
5. You are not going to receive your share of an inheritance, sell your home or obtain a significant and unexpected income within the next 5-6 years
    
6. You don’t own a home or your home equity is lower than £5,000
    
7. You are not receiving SMI payments
    
8. You have no problem paying IVA fees
    
9. You are not an accountant or solicitor, and you don’t work in the law or banking industries
    
10. You are not planning to take out a new loan within the next 5-6 years.

If this sounds like you, then getting into an IVA might work for you. However, we encourage you to contact a third-party debt advisor through our recommended platforms to get a concise answer about your situation, so you can make the best possible decision.

What Debts Can You Include in an IVA?

Here you have the full list of all the debts you can include in your IVA:

• Payday loans
• Personal loans
• Credit cards
• Catalogues
• Joint debts
• Phone debts
• HM Revenue and Customs VA
• National insurance
• Home Arrears
• Council tax
• Benefit overpayments
• Store cards
• Overdrafts
• Income tax
• Tax credit

You can include practically any type of unsecured debt into an IVA, which will help you to write off a big percentage of your debts at the end of the 5-6 years. However, keep in mind that you cannot include any type of loan or product that has been secured against a possession of yours such as your home or car.

Pros and Cons of an IVA

Comparing the pros and cons of this debt solution will help you to quickly decide if an IVA is worth it for you - here’s what you need to know.

Pros:

• Best option when you owe more than £5,000-£10,000 to multiple creditors
• You will be able to write off a big percentage of your debts at the end of the 5-6 years
• It has a set due date that will help you to organise your finances
• You can request a 9 month payment break
• The monthly payment can be as low as £100
• You can cover a wide variety of unsecured debts into one single monthly repayment
• You will receive legal protection
• You can freeze the interest rates and charges
• Creditors will stop calling you

Cons:

• The IVA monthly repayments can increase if your financial situation improves
• If you fail to pay the IVA then you will be left with all of your original debts
• An IVA cannot help you if you owe money to creditors in the EU

F.A.Q

If you still need more information to find out if an IVA is worth it for you, then the answers to the most frequently asked questions will help you.

How long does an IVA last?

An IVA will last for 5 years and you can request an extension of an additional 12 months. However, keep in mind that an IVA can last longer if you interrupt it by requesting a 9-month payment break, for example.

What does an IVA  stop you doing?

During an IVA you cannot obtain any new loan, credit card or similar credit products. It can also affect your actions regarding income, employment and business because they all will directly affect the agreement. In exchange, the creditors will stop calling you and they will also freeze the interest rates and charges.

How long does an IVA stay on your record?

An IVA will stay on your record or credit file for six years since the date it begins. Even if you finish your IVA early, it will still remain on your credit file but under the label of “complete”, something that might help you when trying to get a new loan or credit card.

Can you go abroad with an IVA?

Yes, you can go abroad with an IVA. You will still have to make the agreed repayments during the entire duration of your IVA, even if you live abroad. If we are talking about a vacation trip, then you can go abroad without restrictions.

Is it possible to get a mortgage after an IVA?

Yes, it is possible to get a mortgage after an IVA. Nonetheless, you need to remember that you might not be eligible for low mortgage rates, especially if the IVA item is still present on your credit file.

Can I get a credit card after an IVA?

Yes, you can get a credit card after successfully completing your IVA. However, since it will appear on your credit file, it might be harder to get approved for a new credit card. It is advised to start off by requesting a secured credit card.

Do I have to declare an IVA after 6 years?

You might be obligated to declare an IVA after 6 years, even when it has been already removed from your credit file. This is usually the case when applying for large loans at traditional banks. You can ask this question during a consultation with a third-party debt advisor that you can contact through our recommended platforms.

Can I keep my bank account if I have an IVA?

Yes, you can keep your bank account even if you have an IVA. However, many Britons that opt for an IVA end up creating a new bank account to handle the repayments. Our recommended platforms can connect  you with a third-party debt advisor that can provide better advice regarding this matter.

How much does an IVA cost?

The percentage will vary depending on the Supervisor fee, which can range from 15% to 18%. This will cover the monthly administration of your repayments and distributing them amongst your creditors.

How does an IVA affect your life?

During an IVA you won’t be able to take out new loans or obtain new credit products such as a credit card. Furthermore, due to the windfall clause, any unexpected money you make such as selling your home or getting your share from an inheritance, will have to be paid into the IVA. You should also consider that if you increase your income while in an IVA, your debt repayments might go up, as you have to communicate these changes to your Insolvency Practitioner (IP).

Can an IVA be less than 5 years?

According to the Insolvency Act 1986, there isn’t a set length for an IVA, which means that it can be less than 5 years. If you want to finish your IVA early, then you will have to make a lump sum payment to finish paying your pending debts. You should consult with a third-party debt advisor or with your Insolvency Practitioner.

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