IVA’s and Living on a Budget

Discover how to manage your money and lifestyle during the term of your IVA

Signing up for an IVA is not a quick fix for your debt problems. Typically, an IVA will run for a period of 5 years during which time you’ll have to be very disciplined with your personal finances in order to make sure you can make the monthly repayment you’re legally bound to under the terms of your IVA.

Here are some of the most common areas you’ll need to consider when living with an IVA:

1. You won’t be able to rely on credit any more. Your IVA will only be a success if you’re strict with yourself and stick to what you can afford. Your Insolvency Practitioner will have worked out a monthly amount you can reasonably afford based on your income and reasonable living expenses. If your expenses start getting out of hand, it could cause you to miss payments to your IVA and as a result, leave you facing bankruptcy.
2. Remember why you applied for an IVA in the first place, it may be tempting to fall back into old habits but the prospect of a debt free future and being able to enjoy life again at the end of your IVA should help keep you focused.
3. Write down all your outgoings on a daily/weekly basis. This will help you to stick to your new budget and ensure you can make your IVA repayment every month. If you overspend one day then make sure you compensate for this on another so that you’re not out of pocket further down the line.
4. Managing your expectations of life with an IVA is also critical if you’re going to be able to see it through successfully. Extravagant holidays, designer clothes, expensive Christmas gifts and much more will all have to fall by the way side. If you’re mentally prepared for this at the start of your IVA then it will make your new life on a budget much easier to deal with.
5. If at any point you’re tempted to stray from the terms of your IVA, then it’s important to know the consequences. Bankruptcy could result in you losing your home and your job, will affect your credit rating for 6 years and details of it will be made public. Bankruptcy can be a very high price to pay for not complying with your IVA.
   

If you’ve had the right professional debt advice and been told that an IVA is the best debt solution for you, then you need to make sure you do everything you can to stick to it.

It’s also vital that you contact your Insolvency Practitioner if your circumstances change at any time so they can review your financial situation and how it might affect your IVA.

If you want to learn more about what living with an IVA could mean for you, then call us now on 0800 043 4374 to discuss your concerns in confidence with one of our debt advisors or complete our IVA Wizard and see if you qualify for an IVA.