What Are Debts Included and Excluded in an IVA?

This debt relief is available for residents in England, Wales, and Northern Ireland only.

An IVA is a formal agreement that is based on the debtor’s available money, the extent of their income and third party payments, and is normally evaluated on a combination of these circumstances. It primarily evaluates the amount owed, and what can be repaid straight away and/or over the continued terms.

It is a legal binding between you and your creditor that allows you to get rid of your debt instantaneously or on the agreed term. Most debts are included in an IVA. However, certain debts are excluded in an IVA.

Once an IVA agreement ends, the remaining balances are all written off. Also, the amount of debts that can be included is limitless though some are exempt.

Debts Included In an IVA

Most of the debts can be included in an IVA, especially your unsecured debts. These debts include the following:

Debts Excluded In an IVA

The following are debts that are NOT included in an IVA:

IVA and Joint Debts

Joint debts are debts that you are accountable with another person. It is a debt wherein you and the other person enter into an agreement. A typical case would be a bank loan or overdraft which is in joint names.

If you begin an IVA you are usually required to incorporate all of your unsecured debts. This covers any joint debts. Nevertheless, the Arrangement solely protects you.
The other debtor is still accountable to pay the outstanding balance.

This is complex, so we suggest that you contact us if you have joint debts and is thinking of getting into an IVA. This way, we can help you understand how will it affect you and the other person. We can also give you alternatives to what debt relief would fit your situation.

What Happens During an IVA?

A proposal will be presented to your creditors prior to an IVA. Once agreed by your creditors, you’ll start making payments towards the IVA for 60 0r 72 months. This happens if the agreement states for regular installments. If not, you can pay through a lump sum IVA. This allows you to make a one-time payment for your entire debts.

After you’ve completed an IVA, you’ll get a certificate of completion and any outstanding balance of such debts included will all be written off.

Is IVA the right Solution for me?

You need to get debt advice before you consider a debt solution. There are several factors to be considered before getting into an IVA, Debt ConsolidationBankruptcy, Trust Deeds Scotland, and Debt Management Plan.