Starting an Individual Voluntary Arrangement, or IVA, could see you clear your unsecured debts in five years. If you’re struggling with debt and would like to clear your credit cards, overdrafts and/or personal loans within five years – and potentially have some of that debt written off – an IVA could help you to achieve that.

However, there are some conditions before you apply. We’ll tell you about them here, or you can find out more at http://www.debtadvicenow.co.uk/iva/.

Generally, IVAs are only appropriate for people with over £15,000 of unsecured debt, who can’t afford to repay it. That doesn’t include your mortgage, which is a form of secured debt. In fact, if you are a homeowner, you may be required to release equity in your home, although it’s very unlikely your IVA would lead to you selling your home.

One benefit of an IVA is that it should lower your monthly payments towards your unsecured debts – which can make essential expenses like a mortgage, Council Tax, or utility bills affordable again.

An Individual Voluntary Arrangement is managed by an Insolvency Practitioner (IP), who will negotiate fair and affordable payments with your lenders. You need an IP if you plan to enter into an IVA, because it is a formal insolvency agreement. Once you sign up to the IVA, and if your lenders accept it, they cannot take legal action to recover the debt from you and will agree to write off part of the debt at the end of the IVA’s term.

The partial ‘debt write-off’ can be an appealing idea for anyone with debts they’re struggling to repay. However, it’s on the condition that the IVA doesn’t fail – i.e. you make all your payments towards the IVA for as long as it lasts. So it’s vital that you’re confident you can afford the monthly payments, and commit to them, before you apply. A debt expert can offer advice on this matter.

Finally, an IVA would be recorded on your credit record for six years. It’s more difficult to borrow money while it’s on there – and while your IVA is in progress, you wouldn’t be allowed to borrow anyway, except in special circumstances. A debt expert can tell you more about the conditions of an IVA if you’d like to know more.