Individual Voluntary Arrangement (IVA)

An IVA is a formal debt agreement between you and your creditors for you to make a reduced payment towards your debts each month over a set period of time (usually 5 years). After the period is over, all remaining debts are written off.

PRO'S

A single, fixed, affordable monthly repayment

Charges and interest rates are usually frozen

Protection from further legal action against you

Your assets are protected subject to conditions

Legal protection from your creditors

CON'S

Your credit rating will be affected for 6 years

May affect your employment

Details of your IVA will be entered onto the insolvency register

It means sticking to an agreed budget

Debt Relief Order (DRO)

DRO’s are designed for people who owe less than £50,000, with low levels of income and who are unlikely to be able to ever repay their debts.

The criteria for qualifying for a DRO are:

Your debts must be less than £50,000
Your disposable income must £75 per month or less

A vehicle worth less than £4000
Other assets that you own outright must be less than £2,000 in value

PRO'S

Make no repayments towards your outstanding debts

Debts covered by the DRO are usually written off after 12 months

Charges and interest are usually frozen

Legal protection from your creditors

CON'S

Not available to homeowners

Only available to residents of England, Wales and NI

Not all debts can be included in a DRO

Credit rating affected for 6 years

If your financial circumstances improve during the 12 months following the approval of the DRO it could be revoked meaning you would need to find an alternative solution for your debts.

Debt Management Plan (DMP)

A Debt Management Plan (DMP) is an informal agreement between yourself and your creditors for paying back non-priority debts such as credit cards and bank loans. All included debts are consolidated and a single reduced monthly repayment is made towards all debts until the total amount is paid off.

PRO'S

Make a single, affordable monthly repayment

All charges and interest is usually frozen

On completion, all debts will be paid off

CON'S

Not legally binding on creditors

Only non-priority debts can be included

Because you will be paying back your debts in full, the DMP could run for some considerable time

Your credit rating will be affected for a period of up to 6 years

Bankruptcy

If you are unable to repay your debts and are looking for a completely fresh start with all debts written off, bankruptcy may be a solution. It is important to note however that there are serious implications with going bankrupt so you must seek professional financial advice before deciding on this route out of debt.

PRO'S

All unsecured debts will be written off

Creditors can take no further legal action against you

Charges and interest of unsecured debts only will be frozen

Depending on your circumstances, you may not have to make any repayments towards your debts

CON'S

Your assets, including vehicles (subject to value) and your home, may be included in your bankruptcy

Your bankruptcy will be entered onto the insolvency register

Your credit rating will be affected for a period of 6 years

You may be prevented from holding certain types of employment roles

start with support

contact our helpline

Arkle Insolvency Limited Registered Office: Arkle Insolvency, Maple Court, M60 Office Park, Clifton, Manchester, England, M27 8FF. Registered in England and Wales Registration number 13068468. Data Protection Registration Number ZA826877. Adele Cardoso is licensed as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. All work undertaken by Arkle Insolvency Limited, Adele Cardoso (IP number 30710) is subject to the Insolvency Code of Ethics.

Money Helper is an important service set up by the Government. They provide free debt counselling, debt adjustment and credit information, find out more here: www.moneyhelper.org.uk The Insolvency Service is a Government agency that provides services to those affected by financial distress or failure you can find out more here.

Arkle Insolvency proposes and administers Individual Voluntary Arrangements (IVAs) only. Advice is provided on the basis that there is reasonable contemplation of an insolvency appointment, once it is apparent that an IVA is likely to be the most appropriate debt solution.

Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA. If your IVA fails any debts remaining will not be written off. Failure of your IVA could lead to Bankruptcy, although this is rare and alternatives may be available. Your ability to obtain credit will be affected.

Creditor Guide To Fees – England And Wales

Credit Guide To Fees – Northern Ireland

IVA Protocol

Is An IVA Right For Me?

Options for dealing with your debts: Overview – GOV.UK