· Possible release of home equity – if not possible then often debtors are asked to make IVA monthly payments for 6 years rather than 5 – the 6th year being in lieu of the un-releasable equity
· Minimum level of debt – unsecured debt total needs to be at least £5000 and minimum monthly payment is usually £80.
· No more borrowing – whilst in an IVA you will not be able to use credit or store cards – these must be cut up. It should be possible to renew an existing mortgage during an IVA.
· Keep to a regimented regime during the IVA – IVA payments must be maintained during an IVA or the arrangement could be terminated. In extreme circumstances it may be possible to take a payment break during the IVA
· Damaged credit rating – certainly during the IVA and immediately after it
· Longer than bankruptcy – an IVA will usually last for 5 years compared to bankruptcy that normally lasts for one year, though if there is disposable income, a payment order may result in payments in bankruptcy for 3 years.
· You must include all unsecured creditors – if this includes your own bank, then a new bank account will be required.
· Professional status – some jobs will not allow an employee to become bankrupt or enter in an IVA. It’s important to check terms and conditions of employment.
· Insolvency register – an IVA is a form of insolvency so details of the IVA can be found in an online register.