Would you know if you needed an Individual Voluntary Agreement (IVA)? Have you heard of an IVA before? Many people haven’t, but they are one of the most commonly used personal debt solutions in the UK. In 2022 alone, 88,000 people started an IVA.
An IVA is a formal and legally binding agreement between an individual and their creditors to pay back debts over time. The agreement is approved by the courts and both parties have to stick to it. There are terms both sides have to agree to, such as halting interest payments and the debtor having to inform the creditor of any increases in income etc.
Kevin Arndell, one of the leading experts on The IVA Forum, a free online forum helping to fill the knowledge gap around IVAs, found himself having to begin an IVA in 2010. Now he’s out the other side he’s keen to share his story to help those in a similar position.
Like many people, Kevin was sheltered from the realities of household finances as a child and discovered credit cards when he left home at 18. While he never missed a payment, he took on higher and higher limits and took out new credit cards to pay off existing cards. His debts steadily crept up.
In 2010, Kevin took out a personal loan to pay off his credit cards. This was consolidated and re-financed a couple of times until it hit around £20,000. With the promise of a pay rise in the near future, Kevin wasn’t too worried as he would be able to afford the repayments. However, austerity-hit and the pay rise was taken off the table.
This opened Kevin’s eyes and forced him and his partner to take a serious look at their financial situation. Kevin thought by then they had around £30,000 in total debts. In reality, it was £65,000.
After looking at their repayment options, Kevin and his partner decided an IVA was the best way to pay down the debt. Monthly payments of around £460 were agreed to cover two interlocking IVA’s, and Kevin and his partner found they adapted well to the new financial regime. They found they had more money – REAL money – to play with, as the IVA payment was far less than the debt repayments had been.
A set amount was allocated to essential expenses and Kevin found taking physical cash for the weekly shop gave him the confidence and security he needed to feel he was regaining financial control.
The IVA ended in 2014 and since then, Kevin has learned several valuable lessons. He’s stayed in control of his finances and still, nine years down the line, lives within the budget set while in the IVA. He’s also managed to save a little each month.
Would he do it again? Well, he prays he never has to, but if he were to find himself in significant debt again then he would. It wasn’t an easy ride but the relief from juggling and cutting financial corners was palpable.
While Kevin ultimately came out the other side of his IVA with greater financial confidence, it isn’t the right option for everyone and it’s a very complicated and emotional matter.
The IVA Forum was set up in 2022 by founder Ryan Radford, Managing Director of IVA Mortgage Expert, to support people through their IVA journey. Its aim is to help thousands of people in the UK understand what an IVA is, how to set one up and how to manage the impact on your lifestyle.
The active community encompasses a number of IVA experts and ‘survivors’, who offer direct support from real-life experiences, for anyone concerned about their finances.
Find out more and join the community, here: www.theivaforum.co.uk/
