When faced with mounting debt and a dwindling bank balance, you may wonder what the outcome will be if you don't pay all your bills. Stretching your budget beyond capacity may seem like the best idea, but it could land you in financial hot water. Could an IVA or DRO (individual voluntary arrangement or debt relief order) be better for your mental health and finances? This guide helps you decide if an IVA or DRO suits your financial needs and how to get started if they do.
You may feel overwhelmed when comparing a debt relief order vs IVA . Deciding on an DRO vs IVA can be challenging if you don't know how either work. And so, the first step to determining if an IVA or DRO is best for you is to understand how each works. This guide will simplify the process if you're trying to decide on DRO vs IVA. Below, you'll learn more about debt relief orders vs IVA and the best places to find qualified advisors who can provide further insight into applying for an IVA or DRO. We also include some FAQs to help put pressing DRO vs IVA questions to rest.
DRO vs IVA ✅ The Main Differences Between an IVA and a Debt Relief Order
|
Difference |
IVA |
DRO |
|
Length of time |
Typically lasts 5-6 years |
Typically lasts 1 year |
|
Assets |
Assets protected |
Assets allowed up to £2000 only |
|
Creditor charges |
Interest and charges frozen |
Moratorium period enforced so creditors can’t take action against you or enforce any debts |
|
Costs |
Varies according to management service |
£90 fee that can be paid in instalments |
|
Debt write off |
Large amount of debt is written off once the IVA is complete and then the applicant must continue making agreed payments |
Debts are wiped and you don’t have to make monthly payments |
So What's Better, IVA or DRO?
The most notable differences between DRO and IVA is that DRO is suited to people that find they’re unable to make any payments, don’t have assets worth more than £2,000, and have unsecured debt below the over £30,000 threshold.
IVAs are ideal for people with unsecured debt over £5,000 and have multiple creditors. If you own your own assets and can afford to make some payments to creditors, IVAs are better suited.
Chatting with a professional debt solution advisor is the only way to determine if you’re making the right decision for your financial situation.
Where Can I Get an IVA or DRO? - Top Best IVA or Debt Relief Order Providers UK for 2023 ✅
- Help My Debts Pro : Best Platform to Connect with Debt Solution Advisors Who Can Help You Choose Between DRO or IVA
- Viva Debt Help : Best Way to Find Debt Solution Providers Offering Unbiased Information on IVA or DRO Meaning and Differences
- 123 Debt Fix : Reputable Platform to Request Further Advice on IVA vs Debt Relief Order
- Debt Nurse : Good Place to Get Connected with Debt Solution Advisors Qualified to Advise on DRO vs IVA
Benefits and Risks of an DRO vs IVA
Consider the pros and cons of IVA and DRO to determine which is best suited to your needs.
IVA Advantages to Consider
-
Your instalments are focused on affordability, not total debt
- Protection provided for your assets
- No harassment from creditors for payment
- Interest and fees are frozen
- You’ll be legally protected from legal action
IVA Disadvantages
- You’ll have a record on your credit report for 6 years
DRO Advantages
- Only 12 months long
- Debt and interest frozen
- Relatively inexpensive
- Insolvency practitioner will manage contact from creditors
Debt Relief Order vs IVA: DRO Disadvantages
- You can’t apply if you’ve had a DRO with another provider within the last 6 years
Should I Sign Up for an IVA or DRO Today?
DROs and IVAs have several similarities and several differences. Understanding those differences and what makes an IVA or DRO viable solution is a good idea before deciding which one is best for you - the following services can assist you in understanding which option is most suitable for you.
Help My Debts Pro: Best Platform to Connect with Debt Solution Advisors Who Can Help You Choose Between DRO or IVA
Whether you want a DRO or IVA, Help My Debts Pro is a great platform to start your investigations. Here, you can connect with leading debt solution advisors who will explain all debt solutions available to you, making it simpler for you to choose DRO or IVA based on your financial situation and needs. When applying for advice, ensure you have your debt details and your personal particulars handy.
Highlights of Getting Help Choosing Between DRO or IVA
- Quick debt assessment online
- Access reputable advisors
- Make a confident, educated decision
- No obligation
Pros of Connecting with Advisors Offering Guidance on a DRO or IVA
- Unbiased advice provided on options
- Reduce or clear debts over £5000
- Interest and fees stopped
Cons of a DRO or IVA
- DRO of IVA may not be suited to your situation
Viva Debt Help: Best Way to Find Debt Solution Providers Offering Unbiased Information on IVA or DRO Meaning and Differences
Viva Debt Help provides a great platform to quickly apply for contact from reputable, accredited debt solution advisors. When connecting with debt solution advisors, you can expect to receive further information on the IVA or DRO meaning for your finances (and budget). There’s no obligation to take up any of the solutions presented and you will only be charged the relevant fees if you choose to go ahead.
Highlights of Understanding IVA or DRO
- Make a sound financial decision
- Speak with friendly advisors
- Get out of crippling debt quicker
- Stop harassment from creditors
Pros of Obtaining Expert Advice on IVA or DRO
- You can reduce or write off debts
- You’ll be protected from creditors
- Monthly instalments are low
Cons of IVAs
- IVA and DRO have costs attached.
123 Debt Fix: Reputable Platform to Request Further Advice on IVA vs Debt Relief Order
123 Debt Fix is another platform well known for helping over-indebted Brits connect with debt solution advisors who can provide advice on IVA vs debt relief orders that’s unbiased and factual. Fill out a quick form and wait for an advisor to get in touch with you. Each advisor is accredited, reliable, and reputable in the industry, committed to the regulations set in place by the FCA (Financial Conduct Authority).
Highlights of Understanding IVA vs Debt Relief Order
- Professional debt solution provider will contact you
- Understand all of your options
- Get friendly advice on all aspects of debt relief
- Speak with qualified experts in the field
Pros of IVAs and Debt Relief Orders
- Reduce monthly outlay
- Get out of debt quicker
- Reduce or write off debt over £5000
Cons of Having to Decide Between IVA vs Debt Relief Order
- IVAs and debt relief orders aren’t always suited to all circumstances.
Debt Nurse: Good Place to Get Connected with Debt Solution Advisors Qualified to Advise on DRO vs IVA
At Debt Nurse, you can expect to connect with debt solution advisors qualified to provide advice on DRO vs IVA in the UK. While you aren’t obligated to accept any solutions recommended, you’ll be able to make an educated decision regarding your finances. If you decide that one of the options provided suits your situation, you will be charged fees that are worked into your low monthly instalments – you won’t be expected to pay any upfront lump sums. The online debt assessment is discreet and quick.
Highlights of Connecting with Advisors Qualified to Advise on DRO vs IVA
- Discreet debt assessment
- Expert advisor will contact you
- Deal with qualified advisors
- Reduce overwhelming debt
Pros of DROs and IVAs
- Financial breathing room
- Harassment from creditors will stop
- Get assistance protecting your assets
Cons of Consulting on DRO vs IVA
- Fees are charged on accepted solutions
DRO vs IVA: Can You Switch from an IVA to a DRO?
Some individuals want to change things during the duration of their debt relief solution. One question that often crops up is whether switching from an IVA to a DRO is possible. While it is possible to switch from an IVA to a DRO, it isn’t often recommended and should only be a last resort. This is because having an IVA and DRO on your credit profile could hurt your credit score and make it even more challenging to get loans, insurance, or credit in the future.
It's better to discuss your options with a debt solution advisor first to ensure that it is the best possible solution for you, whether you take an IVA or DRO. Before making any financial decision, spend some time considering your options, doing research, and talking with experts in the field.
DRO vs IVA: Conclusion
At the end of the day, both IVA and DRO can be a good solution for an over-indebted individual. It’s highly recommended to consider all of your options and get further advice and guidance from a reputable, qualified debt solution advisor. You can visit the Help My Debts Pro, Viva Debt Help, 123 Debt Fix, or Debt Nurse platforms to indicate that you require advice from a qualified debt solution advisor. Each platform can connect you with accredited advisors who work according to FCA (Financial Conduct Authority) regulations.
FAQs
Is a DRO a Good Idea?
Whether a DRO is a good idea or not will come down to your unique financial situation and circumstances. If you’re over-indebted and cannot cater to the monthly instalments of your various debts, a DRO could be a good option for you. Chatting with a debt solutions advisor is a good way to determine what your options are and make a sound decision based on your situation, preferences, and affordability.
Can I Cancel My IVA and Get a DRO?
Yes, you can cancel your IVA and change to a DRO. Whether it’s a good idea will depend on your situation. If you’re paying your IVA in accordance with the terms, but can’t make ends meet, changing to a DRO might seem a better option because it’s over within a year. You’ll have a record on your credit report for 6 years.
What is the Best Alternative to an IVA?
It's hard to say what the best alternative to an IVA is, as each debt solution is based on the individual merits of each case. For instance, for you, a DRO may be a better alternative than a consolidation loan, but that might be different for someone else with other debt. The most common types of alternatives to an IVA include consolidation loans, debt relief orders, and debt management plans.
Will I Get a Bad Credit Record with DRO or IVA?
For the duration of your DRO or IVA, you can expect your credit record to be affected. It could impact your ability to get credit.
Video: IVA or Debt Relief Order UK
Disclaimer: All debt solutions should be very carefully considered. The websites advertised in this paid promotion do not provide debt advice. If you complete the form and provide permission to be referred, they will pass your details onto a regulated debt advice solution provider. All the partners they use are regulated by the Financial Conduct Authority to provide debt counselling. The websites advertised work exclusively with trusted debt solution providers. If you proceed with one of their solution options, they may receive a fee for introducing you to them. The websites advertised are lead generation companies who pass your details onto third parties in order to help you with your debt solution.
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