Will an IVA protect me from debt collection action?

If you are struggling to maintain payments to your debts, you may be seeking support in the form of a debt solution. There are many debt solutions out there, but if your main priority is protection from your creditors, an IVA may be your best option. You can get advice about IVAs online or over the phone – it’s never been easier. But before you set up an IVA, we’d recommend learning more about how it can help you and what protection it will provide.

So, what about protection?

If you want to avoid any further collection action being taken against you, setting up an IVA should be your top priority. Further collection action such as a County Court Judgement (CCJ) or a Charging Order can be applied if you fail to maintain payments towards your debts, but an IVA will protect you from them. Even if you have started making payments to a CCJ or have an attachment of earnings, these will stop if you get an IVA.

A CCJ is an order from the court which demands that you pay a specific amount each month towards the debt. Once a CCJ has been registered by the court, the creditor can then apply for a Charging Order; this secures the debt against your property. You wouldn’t have to sell your home, however, if you did sell your property in the future, the creditor would receive enough money to satisfy the debt and the accumulated interest before you received any funds from the sale.

It can be daunting to think that your debts can be taken to court or even secured against your property, therefore, if you are struggling to maintain your payments and want to protect your finances and your home, we’d suggest you act now.

What are the pros and cons of an IVA?

Like every financial solution, an IVA will come with its own advantages and disadvantages, so it’s up to you to decide whether the pros outweigh the cons before you take your application further. Let’s take a look at the most common advantages:

All your creditors will be dealt with in one monthly payment, which is calculated on your affordability, with the agreement lasting within a limited period, usually 5-6 years.

The remainder of your debts will be written off at the end of the term regardless of how much debt is still outstanding.

Your creditors cannot pursue you for the debts once the IVA has been agreed, they cannot apply any further interest or charges, or take any legal action.

Your home will not be compromised, but you will be expected to try and re-mortgage towards the end to pay off your IVA. Usually this isn’t possible so you will be in your IVA for 6 years, rather than 5.

And the disadvantages?

If you fail to maintain the agreed repayment, the IVA may fail which could result in you owing more than when you started.

You cannot borrow any further credit and there may be some spending restrictions.

You’ll be added to a public Insolvency Register and it will affect your credit file for 6 years.

If you receive a lump sum during the term, you’ll be required to pay it into the IVA until your debts are paid in full.

Why not apply for an IVA online with Angel Advance?

You can now set up an IVA on the phone or provide us with all the information for an IVA online. Before applying for any financial solution with a regulated company like us, you will need to get debt advice first. You can do this online, too! Once you have been through the confidential Online Debt Advice Tool and you think you would like an IVA, press “Submit”, and we will get the paperwork prepared for you.

Get started today by clicking here, or if you’d prefer to speak with an advisor about setting up an IVA, please call us on 01925 599400.