One option for resolving unsecured debt is to enter an IVA. The IVA debt solution is typically a 5 year solution where a monthly payment is made to cover all unsecured debts. The IVA debt advice is for people living in England, Wales and Northern Ireland.
IVA is short for an Individual Voluntary Arrangement. Over 40,000 people enter IVAs every year in the UK to deal with their debt problems. However, as this is a debt solution for people living in England, Wales and Northern Ireland. People in Scotland cannot enter this debt solution but can enter a Trust Deed in Scotland.
IVA Scotland Equivalent
You can read more about the Scottish version of the IVA, the Protected Trust Deed here.
If you now live in England, but the debt was taken out in Scotland you can enter the IVA option. The Trust Deed would no longer be applicable. Many people in Scotland believe the IVA is suitable, however you are not able to enter this debt solution if you are living outside of England, Wales or Northern Ireland.
Difference between IVA & Trust Deed?
There are some differences between an IVA and a Protected Trust Deed, although they work in a very similar way.
Location: A Trust Deed is for people living in Scotland. An IVA is for people living in the rest of the UK.
Time: The IVA typically lasts for 5 years, while the Trust Deed is usually a 4 year debt solution. Both solutions can be shorter if there’s a lump sum proposal offered to your creditors.
House: Your house and other assets will be valued in both solutions. The IVA values your property near the end, while the Trust Deed values your property at the start and can then be excluded from the remainder of the Trust Deed, as long as there is no / limited equity.
Payments: In a Trust Deed you must repay at least 10% of the debt after insolvency fees. In an IVA there is no repayment percentage.
You can take the debt analyser to see whether you would be suitable for an IVA or Trust Deed in Scotland.