Each situation is different. To determine what options are available, an income and expenditure form would need to be completed to understand what your affordability is. This would then determine what options are available to you. In England, Wales & Northern Ireland there are options including self-help, informal arrangements, Debt Management Plans (DMP), Consolidation loans, Individual voluntary arrangements (IVA), Bankruptcy, Debt Relief Order (DRO), Administration Orders. In Scotland, options include self-help, informal arrangements, consolidation loan, Protected Trust Deed, Sequestration & Minimal Asset Process.

An individual voluntary arrangement or IVA is a formal agreement between you and your creditors. It is a fixed-term debt plan that legally protects you from your creditors. An IVA freezes interest and cuts your monthly repayments to an affordable level. Better still, any debt left unpaid when the term finishes is written off. The exact amount of your monthly payment will depend on your circumstances but can start from as low as £70. If you are a homeowner, once your IVA is approved your home can be protected. If you have a private pension this can also be protected. If you have a private pension this will also be protected. Typically an IVA will last for 5 years with you making an affordable monthly payment from your income into your IVA. Once your IVA has been fully approved, you don’t need to worry any more about your creditors pursuing you. Your insolvency practitioner who supervises your IVA will deal with all your creditors. Once the final IVA payment is made, you are no longer be liable for any of the debts included in your IVA and there will be no further balance to pay, even if this means your debts have not been repaid in full.

Yes, once your IVA is approved all collections contact from creditors should cease however they still legally have to send you some items like annual statements. It may take a while for creditors to amend their systems but within 1 to 2 months of the IVA starting, all communication from your creditors should stop. Creditors are legally bound into the terms of an IVA, consequently preventing them from pursuing you for the debt.

We provide free no-obligation advice to anyone who is considering whether an IVA is the right solution for them. All options will be explored and if you decide that an IVA is not for you we will help you find the solution best suited to your circumstances. Free debt advice and information is also available to customers from Money Helper (www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt)

Immediately after your IVA is approved all interest on your unsecured debts and all charges will be frozen. It is important to note that debts such as mortgages or ongoing car finance will not be included in your IVA and you will continue to pay these as normal. After your IVA is approved you may continue to receive correspondence from some of your creditors. All you need to do is to send this to the supervisor of your IVA who will remind those creditors to update their records to show that you are in an IVA and they must only deal with your IVA supervisor from now on. If your IVA is terminated because you don’t keep to the agreed terms then the interest which was frozen is likely to be added back to your debts.