IVA and Debt Management

A summary of the main differences between an IVA and a Debt Management programme.
Many people on debt management may be better off on an IVA, however not everyone qualify's for an IVA. If you are in doubt, please contact us for professional debt advice specific to your circumstances.

Formality of agreement

  • A debt management programme is an informal agreement.
  • An IVA is formal and legally binding.

Minimum debt & creditors

  • £2,000 of unsecured debt with at least 2 creditors is required for debt management.
  • £15,000 is often quoted as the minimum unsecured debt with at least 3 creditors for an IVA. Due to our Low Fee IVAs compared to fees of most other IVA companies, we routinely get IVA approved from less than £15,000.

Minimum payments

  • £125 per month our minimum payment for debt management.
  • £200 per month is the normal minimum for an IVA. However due to our Low Cost IVAs we have placed many clients on IVA who pay less than this.

Amount paid back

  • Debt is repaid in full on a debt management programme.
  • A portion of the debt, up to 70% depending on personal circumstances, may be written off on an IVA.

Your Assets

  • Your assets are not a factor in debt management.
    You do not have to be insolvent to be accepted on debt management, meaning your assets can be worth more than your debts. To be accepted on debt management, you just need to be able to pay £100 per month towards your debts. It matters not that you have £100,000 of equity in your home or own an expensive car.
  • Your assets are a factor in an IVA.
    An IVA is intended to be a less server alternative to bankruptcy. Instead of the Official Receiver taking everything from you as in bankruptcy, you are given to chance to avoid this by paying back whatever you can over 5 years. For homeowners with equity in their property, this normally means remortgaging at some point during the IVA to raise funds to pay towards the IVA. You can't enter into an IVA if for example your debts are £50,000 but you have £150,000 of equity in your property. You are not insolvent as your assets do outweigh your debts. Your creditors could bankrupt you and get all their money back.
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