IVA – Payment break

An Individual Voluntary Arrangement (IVA) is normally a five-year agreement with your unsecured creditors that helps you avoid bankruptcy. You only pay 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.

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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 couple were able to have a significant payment break after having a child and yet were able to ultimately avoid bankruptcy and then repay only a proportion of their unsecured debts after we set up an IVA for them.

IVA case study – how a payment break may help

We helped a couple who owed approximately £30,000 between them on unsecured loans and credit cards. After their living costs were taken into account, they could afford to make a monthly payment of £310 to their debts. However, they were soon to be expecting a new baby and this meant their household income would reduce due to maternity leave.   This meant they would not be able to afford any payments to their debts for six months.

We set up an IVA for each client, in which the creditors agreed for them to have a payment break from paying their debts for six months while they had no surplus. They would then continue paying their IVA, taking into account their new increased living expenses. Their new payment was £150.

Creditors ultimately agreed to write off £20,000 of their debt and reduced their monthly debt payments by more than £500.

An IVA may help you, even if you need a payment break

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. Read more about the pros and cons of 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.