IVA – When switching from a Debt Management Plan

An Individual Voluntary Arrangement (IVA) is normally a five year agreement with your unsecured creditors that helps you avoid bankruptcy. You get protection from those 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. You can 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 all kinds of 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 switch from her Debt Management Plan, avoid bankruptcy, and then repay only a proportion of her unsecured debts after we set up an IVA for her.

IVA case study – switching from a Debt Management Plan

We originally helped a shop assistant set up a Debt Management Plan (DMP). She owed £15,000 (mainly to credit cards) and, after her living costs were taken into account, could afford to make a monthly payment of £200 to her debts. She initially preferred a DMP as she felt she could pay her debts back in full.  

However, even though creditors typically freeze interest and charges in a DMP, in her case one of her creditors was continuing to add interest and charges. This meant it would take a lot longer than expected to pay the debts back in full.

In view of this, we reviewed the client’s debt solution options with them. The client decided to proceed with an IVA, meaning all interest and charges were frozen and ensured that the client paid back their unsecured debts in five years.   

An IVA may help you, even if you are currently in a Debt Management Plan

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.