What Is IVA Doing? How To Get Out Of Debt In Five Years

For those of you that have ever watched Jeopardy! on TV, if the answer were “A viable way to get you out of debt in five years,” the question would be “What is IVA?”

Indeed, more and more people are beginning to ask, “What is IVA?” It is little wonder when you consider that very few people actually knew what they were up until a few years ago, despite the IVA originating in 1986 through the Insolvency Act.

It is a sad fact that many individuals in debt today will never be able to say that they are completely free of their creditors. With the cost of living rising and the level of salary payments struggling to keep up, there is less disposable income on offer and debts are rising as a result, to the point that some individuals can no longer afford to repay them at all. That is where the IVA can come in handy.

So, “What is IVA?”

An IVA is an agreement, an Individual Voluntary Agreement to be precise, that allows you to pay a set amount every month towards paying off your debts. The amount of the total debt is reduced as a result of these set monthly repayments and what is left is written off after the term of the agreement (usually 5 years). At the end of the term, providing you have kept up repayments, you will be considered debt free.

An IVA is indeed a viable alternative to bankruptcy and can cause you far less damage in terms of credit referencing. The monthly repayments actually contribute to improving your credit rating and thus can set it back on track rather than the IVA doing it any harm. This is completely the opposite effect to a bankruptcy order.

By asking, “What is IVA?” you are leaving yourself open to the possibility of getting out of debt via an affordable monthly payment. A little education about the IVA can indeed go a long way!