A personal insight into the IVA process

The day came when I couldn’t ignore my finances. It was such an uncomfortable experience realising how much debt I was left in following a divorce. It truly hit home when looking over my income vs outgoings and realising what was left didn’t even come close to covering the debt I was in. How am I ever going to get out of this situation? I decided to reach out to a debt advice specialist and discuss my options. I gave them all my details and the experts recommended an IVA.

An IVA stands for an Individual Voluntary Arrangement. It is a legally binding agreement between you and your creditors which states you will pay back your debts to your creditors over a certain period of time to which they have agreed to. If you are struggling to decide if an IVA would be right for you, you can speak to debt advice and IVA specialists such as Money Advice UK.

After taking a few days to digest the information and do my own research I decided to go ahead with the IVA application. The person on the end of the phone was very understanding, didn’t judge my circumstances and this made the whole process painless. They advised me to open a new bank account so I can continue to receive my wages and then it was a case of waiting for the creditor meeting to take place. In order for it to be accepted you need at least 75% of the creditors to accept the terms of the IVA. I waited for the phone call to discuss the outcome and it was good news, 75% of creditors had agreed. An IVA will take around 3-6 weeks to set up depending on how quickly you can gather the supporting information required to present to your creditors. I wanted as quick an outcome as possible so I could move forward with my life. During this process creditors may still chase you. If this is the case you just inform them that you are in the process of setting up an IVA – you may have been given a reference number by the firm setting up your IVA. I simply provided this information and they didn’t contact me again.

This is when the reality of the whole situation hit me. No credit for the next 5 years, 6 years of the IVA being on my credit report and most of all getting used to cash and a budget. Can I do it, absolutely as the pro’s meant not being chased by creditors, having a fixed amount per month payable to my debt (reviewed annually) and the peace of mind that I had taken action.

In the early stages of the process of applying for an IVA you discuss your finances and what your expenditure is. You must be honest as this will give both you and the specialist a clear understanding of where your money goes. This is the basis of your budget and if I can promise you one thing then please take note of this. You are not left penniless, you can still buy groceries, get your haircut, go to the gym, lead a normal life. You just need to keep to your budget and not take out any form of credit.

Fast forward 3 years – is it worth it? Yes, the budget is very realistic, you learn to live within your means. It allows me to make one manageable debt payment a month and I am not being chased by creditors. The time has flown by and I feel in such a better place financially and mentally.

If you owe between £5000 and £10000 or more and are in financial distress, facing court action due to debt, being chased by creditors or looking to overturn legal orders to send bailiffs to your home then do reach out for advice. An IVA could be an option and if not, then talking to a debt advice specialist will help work out your options. Don’t bury your head as it’s not going to go away on it’s on, reach out to the specialists and find out what are your options.