IVA and Debt Management

If you are in debt management, you might be better off with an IVA. It is not always easy to qualify for an IVA, however. In this brief overview, we will take a look at the major differences between the two.

 

Formality of agreement

• A debt management program is an informal agreement.
• An IVA is formal and legally binding.

Minimum debt & creditors

• For debt management, £2,000 of unsecured debt with at least 2 creditors is required.
• For an IVA, £15,000 is often quoted as the minimum unsecured debt with at least 3 creditors.

Minimum payments

• £100 per month is the normal minimum for debt management.
• £200 per month is the normal minimum for an IVA. However due to our Low Cost IVAs we have placed many clients on IVA who pay less than this.

Amount paid back

• Debt is repaid in full on a debt management program.
• A portion of the debt, up to 70% depending on personal circumstances, may be written off on an IVA.

Your Assets

• Your assets are not a factor in debt management.
  You do not have to be insolvent to be accepted on debt management, meaning your assets can be worth more than your debts.
• Your assets are a factor in an IVA.
  An IVA is intended to be an alternative to bankruptcy. Instead of the Official Receiver taking everything from you as in bankruptcy, you are given an opportunity to avoid this by paying back whatever you can over 5 years

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