IVA calculators: How do they work?

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IVA calculators

Individual voluntary arrangements (IVA) are a type of debt solution for unsecured debts. IVAs usually involve monthly payments for five years towards your outstanding debts. After this time, the debt is usually written off, so this is a workable way for most people to deal with their debt problems.

An IVA calculator is a tool to work out how much debt you would need to pay to your creditors and how much of this debt would be written off if you entered into an IVA. These give you an idea of how much you would need to pay over the five-year period, and they do this very accurately.

How do they work for IVAs?

IVA calculators can be an online tool on debt support websites. These usually work by the use of a sliding bar which you can adjust to match your debts. For the most accurate quote, you will need to provide three things:

  • The amount of money you owe.
  • The number of creditors you owe money to.
  • Your monthly income and outgoings.

An IVA calculator is a good way to see if you have a high chance of being accepted for an individual voluntary arrangement. The more financial information you provide in the assessment, the more accurate the results will be.

Are IVA calculators reliable?

As mentioned, IVA calculators are accurate if you include all the financial information you have available. For a more tailored approach on how to deal with your debts, it’s advisable to make an insolvency appointment.

An insolvency practitioner will analyse the entirety of your financial details and offer advice specific to your situation. They may look at your monthly income and outgoings and set up a payment scheme, which you can then pass on to your creditors.

Ensure that your insolvency practitioner is reputable and fully qualified to be dealing with your finances. The best way to verify if an insolvency practitioner is genuine is to use the government tool.

Where to find an IVA calculator

You can find the basic IVA calculators online, but these will only give a cursory estimate of your payment plan. For more tailored IVA calculators, it’s best to look for ones that ask for the most financial information, such as income, liquid assets owned and monthly expenditure.

A lot of websites may not comply with data protection or may use the IVA calculator as a means of contacting you for an appointment. Be aware of this and do not enter your phone number unless you wish to be contacted.

Steps after using an IVA calculator

An IVA calculator is only a rudimentary tool for estimating your payment plan towards your debts. After using one, you may still feel overwhelmed about your financial situation. To help you, some of your next steps can be to:

  • Find more personal advice. You can access Citizens Advice or the National Debt Service for this.
  • Make an appointment with an insolvency practitioner and request an IVA proposal.
  • Look at alternative options for paying off your debts, such as requesting a debt write off from your creditor.
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