Checking your affordability
One of the key benefits of getting an IVA is that you only need to pay back what you can afford against a percentage of your debt; the rest gets written off.
To make sure we understand how much you can afford to pay towards your IVA, we’ll calculate your income and expenditure during our first call with you.
We need to be confident when we offer you the IVA that you’re going to be able to comfortably afford it over the course of five years – with some wiggle room if the unexpected happens. That’s why affordability is an important aspect of every Creditfix IVA.
How is my affordability calculated?
You might be surprised when you call us to chat through your income and expenditure just how much your IVA allows you to spend.
As well as essentials like your mortgage, utility bills and food, here are a just a few other expenses you can specify in an IVA:
- Hobby and leisure activities
- Pocket money for your children
- Toiletries and hairdressing
- Household repairs and maintenance
If we calculate your income and expenditure and it turns out you can’t afford an IVA, we’ll recommend another form of debt solution instead.
Flexibility is always a factor
A Creditfix IVA is designed to be flexible and allow for the different events that might impact your finances over the course of five years.
If, for example, you found yourself with a reduced income because you were on parental leave, you could contact us to let us know, and we could talk through adjusting your proposal.
Similarly, if you had a sudden windfall or inheritance and were able to pay off your IVA, we’d be able to arrange what’s called a full and final settlement meeting for you.
Need to check that your agreement’s affordable?
If you’ve received the details of your agreement and need to double-check something, please get in touch with a member of the caseworker team.
As with any debt solution, your IVA should be affordable and realistic to pay back over a set period of time.
We can have another look at your income information and make sure that there’s nothing on there that we’ve missed. Here are some sources of income it’s easy to forget about:
- Digs money or income from lodgers living with you
- Child maintenance or support you receive
- Other benefits you may receive from the government
It’s important to remember that with an IVA, in the majority of cases, you’ll only be paying towards a percentage of your debt. How much is written off will depend on your personal circumstances, but on average, we write off 70-75% of a customer’s total debt – this could be more depending on your debt level.
Understanding IVA fees
There are some fees associated with setting up an IVA. As a formal debt solution, the law governing your IVA means we can charge two separate fees in relation to the different elements of your arrangement. These fees are taken from your contributions throughout the duration of your arrangement and not something you will need to pay over and above your monthly payments.
The good news is, with a Creditfix IVA, the payments you’ve been told over the phone include the contribution towards your fees. This has already been allowed for in your one, monthly payment calculation.
And this payment is always designed to be affordable for your circumstances.
Should I get an IVA or a DMP?
You may already be in a debt management plan and thinking about setting up an IVA, or you may be weighing up if this could be a viable choice for your circumstances.
Here’s a comparison table to show you some of the differences between the two types of debt solution.
| IVA | DMP | |
|---|---|---|
|
Duration |
IVAs have a set end point; you’ll be in the agreement for five years at which time any remaining debt is written off. | If you’re in a DMP, you’ll continue until the entire debt is repaid – this could take longer than five years. |
|
Amount |
If you’re in an IVA, you’ll be able to write off a percentage of your debt and repay what’s affordable to you. On average, we write off 70-75% of customer debt. | In a DMP, you’ll repay all your debt. |
|
Creditor action |
If your IVA is agreed, your creditors will no longer be able to contact you about your debt, and we’ll liaise with them on your behalf. | In a less formal solution, creditors can still contact you about your debt. |
Frequently asked questions.
Need more info? Here are a few of our most frequently asked questions on this topic. If you don’t see the answer you’re looking for here, give us a ring – we’d love to help.
We understand that life happens – and over the course of five years, things might change that impact your finances. At Creditfix, we’re here for the duration of your IVA with support and flexibility. If you need to make any changes, call and tell us. We can help advise you the best course of action.
It’s very important to be able to stick to your monthly payments to avoid your IVA failing. It’s been tailor-made to fit with your finances and affordability. If at any point you do think you’re at risk of missing a payment, we’re always just a phone call away.
There are fees associated with setting up any IVA. It’s a formal debt solution, and as such it needs an insolvency practitioner to set it up. However, at Creditfix, we include your fees in your monthly payment, so you still only pay one, manageable monthly amount towards all your debts.
It may sound too good to be true, but with an IVA, you really can write off up to 75% of your debt. It all depends on factors like how much you owe, how much is affordable to you to pay every month, and how much your creditors agree to.
Not all your creditors have to agree to your IVA – only 75% of them. When your proposal is first sent off, even if not every creditor agrees, it may still be approved. And if it goes ahead, all your creditors will be bound by the terms of your agreement, and you’ll be protected from being contacted about your debt.