Switch from DMP to IVA and Reduce Your Debt Significantly!
Good news! Based on your current circumstances, you may be eligible to transition from your Debt Management Plan (DMP) to an Individual Voluntary Arrangement (IVA).
Imagine writing off a significant portion of your debt – our IVA customers enjoyed an average debt write-off of 65% in 2023. Even better, 26% of MoneyPlus customers who completed an IVA in 2023 managed to write off over 85% of their debt.
To discover more about how to manage your debt and to receive free debt advice visit www.moneyhelper.org.uk
Are There Better Options for Your Financial Future?
While your current Debt Management Plan is effectively managing your debts and we’re pleased with how it’s working for you, we’d like to explore whether an Individual Voluntary Arrangement (IVA) could offer you even greater benefits. An IVA might help you save both time and money, potentially providing you with financial freedom more quickly. Let’s assess if an IVA could be a better fit for your needs and help you achieve your goals sooner.
Book an appointment for a call back below and one of our friendly, expert advisors will be in touch to talk through the process
IVA Example
On a Debt Management Plan
This is an example of the debt you may owe
Total Monthly Payment
£150
| Debt Level | £24,000 |
| Time Scale to Clear | 19 Years |
On an IVA
This is an example of the savings you could make
Total Monthly Payment
£150
| Debt Level | £24,000 |
| Total Repaid | £9,000 |
| Time Scale to Clear | 5 Years |
£15,000 Debt Written Off
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Discover Your Savings Potential with Our IVA Calculator
Curious about how much debt you could write off? Use our quick and easy IVA Calculator to find out now!
Total debt £
Monthly payment £
yearsEstimate DMP length
(5 years on an IVA)
£
Total repaid on an IVA
£ (%)
Debt written off
This calculator is for illustration purposes only and compares the average amount of debt written off by MoneyPlus Insolvency customers in 2023. If you enter a solution with MoneyPlus we will charge you fees. If you do not enter a solution managed by us, there will be no fee for the advice that we provide. All fees and risks will be explained in full before you enter into a solution. The amount of debt written off is subject to each specific IVA and the values used are for representation purposes only.
What is an IVA?
An IVA is a legally binding agreement between you and your creditors to repay your debts over a set period. It’s designed to make your debt more manageable and to provide relief from creditor pressure.
Here’s how it works:
- Manageable Payments: You make affordable repayments just like now, the only difference is with an IVA it’s usually over five years.
- Peace of Mind: We know your current plan is working, but with an IVA, because its legally binding, you get more protection and security — all creditor communication goes through your Insolvency Practitioner (IP).
- Debt Relief: After the repayment period (usually 5 years), any remaining debt is written off!
IVA Advantages and Disadvantages
Benefits of an IVA
- Significant Debt Reduction: Potentially write off a substantial portion of your debt.
- One Monthly Payment: Simplify your finances with one affordable monthly payment.
- Legal Protection: Shield yourself from bailiffs and other legal actions.
- Creditor Management: Creditors must communicate solely through your Insolvency Practitioner (IP).
- No Extra Costs: Enjoy peace of mind with no additional interest or fees.
- Secure Agreement: Benefit from a legally binding arrangement that provides security.
- Asset Protection: Major assets, including your home, are generally protected.
Considerations for an IVA
- Creditor Approval Needed: There’s no guarantee that all creditors will agree to your proposed IVA plan. If they don’t agree, your current plan will continue.
- Unsecured Debts Only: An IVA primarily addresses unsecured debts; secured debts, like mortgages or car loans, will still need to be managed separately.
- Public Record: Your entry into an IVA will be recorded on the public Insolvency Register.
- Compliance Required: It’s important to comply with the terms of your IVA otherwise creditors may restart collection efforts, which could include bankruptcy.
- Budget Adherence: You will need to follow a strict budget for everyday expenses throughout the IVA period.
- Potential Asset Release: You might be required to release some assets, if applicable, to meet your IVA obligations.
- Impact on Credit Rating: An IVA will impact your credit rating and will be noted on your credit file for six years from the start date.
Find out more about switching to an IVA
Book an appointment for a call back below and one of our friendly, expert advisors will be in touch to talk through the process
IVA Debt Help FAQs
An IVA is a formal arrangement between the customer and creditors (which is legally binding) to pay all or part of their debts. The Solution is set up professionally by an authorised Insolvency Practitioner. They generally last five years, so the customer would be expected to pay everything they can afford outside of agreed ‘reasonable’ living costs.
An IVA will be recorded on your credit report, which will lower your credit score. Here’s how to improve your credit score after an IVA.
An IVA typically lasts five years, but this can vary based on individual circumstances. If there are changes to your financial situation, the IVA could be extended.
Both Debt Management Plans (DMPs) and IVAs allow you to make manageable monthly payments to creditors. However, an IVA is a formal, legally binding agreement that prevents creditors from contacting you directly, while a DMP does not offer this legal protection, allowing creditors to pursue legal action to recover debts.
Setting up an IVA generally takes between four to six weeks. The exact duration depends on how quickly you provide your financial information, the complexity of your financial situation, and how long your creditors take to respond.
As your IVA ages, your credit score should gradually improve, especially as lenders focus more on your recent credit history. Once your IVA is marked ‘completed’ and eventually removed after six years, your credit score may still be low due to limited credit activity during the IVA period, but there are steps you can take to improve it.
At the end of the IVA term, any remaining unsecured debt covered by the agreement is usually written off. This means you won’t have to pay the remaining balance after successfully completing the IVA.
If your circumstances change or you receive a windfall, you may be able to settle your IVA early. Your IP will make an offer to your creditors, known as a Variation. For it to proceed, at least 75% of responding creditors must agree.