Can A Lump Sum Be Used To Settle An Iva?

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An IVA will normally involve making payments towards your debt for five years and include regular reviews of your income. If you have a lump sum, you could settle immediately with nothing more to pay.

An Individual Voluntary Arrangement (IVA) is a solution used by many thousands of people each month to solve their personal debt problems.

The solution is generally based around making monthly payments towards your unsecured debt for a period of five years. During this time interest and late payment charges are frozen and at the end of the agreement any outstanding debt is written off.

In this way, an IVA can result in up to 70% of an individual’s unsecured debt being written off allowing them to continue with their lives debt free.

Full and final settlement IVA

An IVA does not always have to involve five years of payments. An alternative option is to pay off the IVA with a single lump sum amount.

You may be able to get access to a lump sum from various different sources.

This could be from a recently received redundancy pay out, by remortgaging your property or the sale of a property or from family or friends.

The lump sum is paid as a one off amount into the IVA as full and final settlement for the debt leaving you debt free with no further obligation.

The lump sum may not be required immediately but could be accepted up to 6 months after the IVA is in place giving time for cash to be raised.

Considerable advantages

There are some significant advantages of paying an IVA with a lump sum.