An Individual Voluntary Arrangement, or IVA, may be the debt solution you are looking for. But how do you know that another solution, such as Debt Consolidation might be better?

How does debt consolidation work in comparison to an IVA?

The idea behind debt consolidation is that by combining all your debt by getting a loan, you only have to make a single, smaller monthly payment. Your debt consolidation loan should have lower interest and monthly repayments so your debt is manageable.

An IVA works differently. It’s a legally binding agreement in which you make affordable monthly payments, usually for five years. If completed successfully, your creditors will wipe off the remainder what you owe.

Can I still consolidate large debt or is an IVA better?

An IVA is generally an option if you owe above £15,000, whereas debt consolidation is usually for smaller amounts. If you consolidate extremely large debts, you may struggle to repay it. The consequences of not repaying your loan can be severe. It's best to check if an IVA is more suitable option.

What happens if I don’t pay back a consolidated loan?

If you're a homeowner, you might secure your loan against your home, as the interest rates will be lower. However, if you fail to repay a secured loan you risk losing your house. With an IVA, you won't lose your house. The IVA Zone can recommend how you can get more advice. Click to find out how to arrange an IVA and also get some confidential advice to help you get out of debt.