IVA – Moratorium

An Individual Voluntary Arrangement (IVA) is normally a five year agreement with your creditors that helps you avoid bankruptcy. You get protection from your creditors and you only pay back a proportion of your unsecured debts and write the rest off.

If you’re worried about your debts, PayPlan can help you. Call us now on 0800 280 2816 or, if you’d prefer, click the “Get advice now” button to request a call back.

PayPlan help people in debt

Over the last twenty years, PayPlan have helped millions of people who were having difficulty in paying their debts.

Everyone’s circumstances are unique, and our experienced advisers will be able to suggest next steps for you no matter what your financial situation.

This page outlines a very specific case study: where a client was able to have a significant payment break (called a moratorium) due mainly to her career income fluctuations and yet was able to ultimately avoid bankruptcy and repay only a proportion of her unsecured debts after we set up an IVA for her.

IVA case study – how a moratorium period can help

We helped an author who owed over £100,000 on several different loans, credit cards and store cards. She had few living costs as she lived rent-free with her parents who also paid for her food. Her income was very sporadic as it was reliant on obtaining publishing deals for her books. The amount and timing of these royalties was uncertain, so she could not commit to a regular monthly payment.

We set up and completed an IVA over five years, where she would make a payment into the IVA of her royalties as and when she received them. She received no royalties until year 3 of her IVA, however by setting up an IVA, creditors had frozen interest and charges on her debts and were prevented from taking legal action which allowed her to concentrate on writing.

By the time her IVA was completed, she had contributed £15,000 into her IVA which meant creditors agreed to write off £85,000 of her debt.

An IVA may help you, even if you need a moratorium period without making a payment

Are you serious about getting out of debt?

Successfully completing an IVA means avoiding bankruptcy and not having to deal with any more unsecured creditor demands for payment. You’ll normally make just one affordable payment for a set period of time, and creditors included in the IVA must freeze interest and charges at the point your IVA is agreed.

Become a PayPlan IVA client and you get:

  • A personal debt adviser to handle your IVA case
  • Just one regular payment to make, based on what you can afford to pay
  • All the support of a company who have, over the last twenty years, helped tens of thousands of people achieve debt-free status through an IVA
  • After the agreed IVA period, whatever unsecured debt remains is written off

And remember, at PayPlan, we do not charge any upfront fees for setting up an IVA.

However you must bear in mind that if you were, for whatever reason, to stop making payments to your IVA then your plan may fail; in which case your creditors may re-apply interest and charges (which were frozen at the point your IVA was approved) or may even petition for your bankruptcy. 

Want to avoid bankruptcy? Think an IVA could help you manage your debts more affordably? Many people choose to call us on 0800 280 2816 for free no-obligation debt advice, while others prefer to fill in our online Debt Help form so we can call them back.